A Multifrequency Data Fusion Deep Learning Model for Carbon Price Prediction

Abstract

In response to the global need for effective management of carbon emissions and alignment with sustainable development goals, predicting carbon trading prices accurately is critical. This study introduces a multifrequency data fusion carbon price prediction model (MFF‐CPPM), addressing the nonlinear characteristics of carbon trading prices and inconsistent feature factor frequencies. The MFF‐CPPM consists of a feature‐extraction frontend, a multifrequency data fusion transformer, and a fusion regression layer, offering a novel methodological approach in forecasting studies. The model's validity was tested in Guangdong, China's largest carbon trading pilot market. The results demonstrated that the MFF‐CPPM outperformed baseline models in terms of carbon price‐prediction accuracy and trend forecasting. Additional trials conducted in Hubei and Beijing confirmed the model's robustness and generalization capabilities, providing valuable evidence of its effectiveness and reliability across varying market contexts. This study presents a novel predictive model for carbon trading prices, with a unique capability to harness data at differing frequencies. The MFF‐CPPM not only enhances forecasting accuracy but also offers an innovative approach to effectively incorporate multifrequency information. This advancement paves the way for flexible forecasting models in any scenario where data arrive at differing frequencies.