Study On International Carbon Financial Market Operation Mechanism

Global climate change is one of the most serious challenges the human facing economic society in twenty-first Century. Because of melting glaciers, rising sea levels and extreme climate increased makes the global warming more obvious,people began to pay attention to climate change, which is relates to the world economic development and the important subject for human survival. The Research Report of IPCC show that there is a direct relationship between carbon dioxide, other greenhouse gas with human economic activities, so the social from all walks of life began to call the government and other organizations to take appropriate action to reduce carbon emissions. With the "United Nations Framework Convention on climate change" and the "Kyoto Protocol" and a series of important documents issued, all the countries in the world make a consensus about the climate change. It also provides a political framework and legal system basis for all countries in the world about carbon trading. As the largest developing country, China has become the largest CO2 emission countries in the world,and still in an extensive economic growth mode, the coal accounts for about 70% of primary energy consumption. High energy consumption, emissions pollution, and low efficiency are the severe challenges that the Chinese people must face it. If China want to realize energy saving and emission reduction and maintain the consistency of stable economic growth, we must vigorously develop the low carbon finance and make the role of carbon finance trading mechanism, which is further necessary to promote transformation in China’s economic operation mode, It also serves the needs of China’s economic transition.On the basis of market operation mechanism, international carbon financial market operation mechanism will be divided into product supply and demand mechanism, price mechanism and risk control mechanism. Under the low carbon economy, the paper will analyze international carbon financial market operation mechanism, and explore the regularity of the development of low-carbon economy.This paper is divided into four parts as followed:The first part is the introduction. This chapter mainly introduces the background and significance of the paper; briefly expounds the research contents and train of thought and method in this paper. Through literature research, theoretical research,historical analysis and comparative analysis, the paper will analyze international carbon financial market operation mechanism. Meantime, point out the innovative points and shortcomings.The second part is the theoretical basis of carbon finance market trading. Carbon finance is an important area of low carbon economy, so the theory of sustainable development is a key theoretical background. Carbon emissions are a kind of product with special public properties. Considering the externalities of carbon emissions will enhance the rationality of relevant analysis. It is need to be analyzed by Transaction Cost Theory and Property Right Theory. According to Kos theorem, it is necessary to make a clear definition of carbon emissions to solve the externality of carbon emissions. Due to the existence of transaction costs, different property rights system arrangement will produce different alleviative efficiency of resources. As an important economic means, Carbon finance is mainly used in the reduction of social transaction costs and financing functions. It is emphasized that the environmental protection and the sustainable development of the economic production are the important contents of the environmental finance theory.The third part is the main body of the thesis which focus on the analysis of the three mechanisms of international carbon financial trading market operational mechanism.This chapter will introduce the various and multifunctional oversea carbon finance. In the analysis of the structure of international carbon finance market, this chapter summarizes the participation of international carbon finance market, includes supply, endorsers, speculators, intermediary service institutions. They has played a positive role in promoting the carbon emissions trading and achieving emission reduction. For the type of the international carbon finance market operation mechanism, there are mainly two kinds of standards. One is based on the international treaties, international carbon finance market operating mechanism can be divided intothe Joint Implementation(JI), clean development mechanism(CDM) and International Emissions Trading(IET). The other is based on the different operating function, the international carbon financial market operation mechanism can be divided into the product supply and demand mechanism, the price mechanism and risk control mechanism.The first mechanism is the supply and demand mechanism of the international carbon finance market. Supply and demand mechanism is the guarantee mechanism for the effective operation of the market. With the increasing activity of the international carbon finance market, the scale of the international carbon finance is becoming more and more abundant. On the basis of the supply and demand mechanism, this chapter will summarize the types and properties of carbon financial products. It emphasizes the nature of carbon financial products, global properties, commodity properties and financial attributes. Then, it analyzes the basic elements of the supply and demand mechanism of the carbon financial market. And the characteristics of the supply and demand of and the influencing factors of the supply and demand balance are also summarized. Finally it discusses the cause and adjustment of the imbalance of supply and demand of products.The second mechanism is the price mechanism of the international carbon finance market. Price mechanism is the core mechanism of market operation mechanism. This chapter summarizes the framework and characteristics of the international carbon financial market price mechanism, and pointes out that the carbon price mechanism has its unique characteristics. Based on its value, the price of carbon financial products and will be formed by the government and the market mechanism in the primary market and the secondary market. Because of the macroeconomic situation, including the relative price of carbon and energy, financial speculation, climate change,technological progress and carbon emissions policy and other factors, the price of carbon financial products is experiencing a sharp fluctuation. This indicates that the carbon financial market is still not perfect. In order to establish price fluctuations regulation, international organizations and governments need to improve the carbon emissions and related financial support system.The third mechanism is the risk supervision mechanism of international carbonfinance market. Risk supervision mechanism is the basic mechanism of market operation mechanism. There are many uncontrollable risks in the international carbon finance, such as policy risk, market risk, operational risk, liquidity risk, moral hazard and so on. Therefore, to form an effective carbon financial risk supervision mechanism,it is important to set up the formation of a sound pricing mechanism for carbon financial transactions.Only in this way can we solve the problem of asymmetric information, and ensure the orderly conduct of trading rules. This chapter analyzes the operation of the international carbon financial market risk supervision mechanism from four aspects: the regulatory laws, regulatory agencies, regulatory areas and regulatory means.The last part is the construction of carbon finance market system in china. Based on the analysis and research of the current situation of China’s carbon finance market,this chapter summarizes the existing problems in China’s carbon finance market. And the operation mechanism of carbon finance market is a necessary tool for Chinese low-carbon economy model. This chapter further point out the running path of China’s carbon finance market, and put forward the countermeasures and suggestions in constructing the operating mechanism of China’s carbon finance market, such as the intensity of the emission reduction, the initial allocation of the quota, the management mode of the quota allocation, the price mechanism, the risk supervision mechanism,and the operation of the market.