Abstract: Under the background of "carbon peaking and carbon neutralization", it is necessary for the construction of China's power market to fully consider the rapid development of new energy and the need for low-carbon emission reduction. It is urgent to clarify the economic relationship between the power and carbon markets and study the transmission effect of carbon costs to electricity prices. To address this issue, a qualitative analysis of the interaction mechanism between the power and carbon markets is first conducted, concluding that carbon emission costs will ultimately be passed on to power purchasers in the form of electricity prices. Using the Cournot equilibrium model, the formula for the transmission of carbon costs to electricity prices is derived, leading to the conclusion that the transmission rate of regional carbon prices to electricity prices needs to be calculated based on the elasticity of the slope of the electricity inverse demand function. Subsequently, a multiple linear regression model is used to construct the regional electricity demand function, enabling the regional carbon cost transmission rate to be implemented at the data level. Finally, through a case study using data from seven carbon pilot regions as samples, the price elasticity of electricity demand for both regional and national levels is obtained, and the carbon cost transmission functions for each region are estimated.

Key words: carbon peaking and carbon neutralization, power market, electric carbon coupling, carbon cost, transmission rate, power demand function, coordinated development