| In recent years, at the same time of strengthening climate cooperation, countries all over the world also explore their own strategies to reduce greenhouse gas emissions due to global warming and abnormal weather. Paris climate agreement not only shows that consensus on strengthening environmental governance has been reached among countries, but also replies them with the international responsibility for emissions of carbon dioxide emissions.. Under the pressure of haze and international emission reduction commitments, China in 2013 has implemented carbon emissions trading system in five pilot city of two provinces, and plans to build a unified carbon emissions trading system in the whole country in 2017, expects to effectively reduce the cost of carbon emission reduction through the carbon emissions trading system with market mechanism. Being the core of carbon finance, emission trade scheme became a hot issue recently. As a man-made market on the basis of mandatory emission reduction policy, carbon emissions trading market’s system design plays a key role in the market operation and carbon emission reduction activities. EU carbon emissions trading system(EU-ETS) is the world’s first operating carbon emissions trading system with the world’s largest trading volume currently. EU carbon emissions trading system develops with exploration and undergoes several reforms. The framework of the EU carbon emissions trading system, especially the process,performance and direction of the reform, will provide valuable experience and inspiration for the construction of national carbon emissions trading system in China so as to promote the low-carbon development of China. Study to EU carbon emissions trading system will also enrich the low carbon economy and financial theory, and provide theoretical guidance and data support for the scientific decision-making of the government.The EU carbon emissions trading system has been put into operation since 2005, the supply of carbon quota was much higher than the demand due to the imperfect system and other reasons in the first stage(2005- 2007), the price of carbon quota suffered a cliff-like drop. In the second phase(2012- 2008) and the third phase(2020- 2013), the trading system continued to be discussed, revised and improved. This paper starts from the background and theoretical basis of carbon emission reduction and analyzes the content of international climate cooperation agreement as well as their contributions to the development of carbon emission trading system since the Kyoto Protocol. It clears the advantages of the carbon emissions trading system, which is assisted by market mechanism to help reduce emission. The choice of the relevant national’s emission reduction policies indicates the reduction policy based on administrative order is widely used, but because the marginal costs of carbon emission and reduction of countries are different, great differences exist in their carbon tax policies and carbon emissions trading system selections. Judging from the trading mechanism, the carbon emissions trading system can be divided into voluntary and compulsory; from the regional perspective, the carbon emissions trading system can be divided into three levels of the national, international and regional; from the subject of the transaction, it can be divided into carbon emissions trading system based on the project and carbon emissions trading system based on the quota. The existing carbon emissions trading system is based on the two kinds of legal framework and the two kind of mechanism, which forms a trading system with two trading motives and three trading levels. The United Nations Framework Convention on Climate Change and the Kyoto Protocol are the international law foundation of the EU carbon emissions trading system, The Single European Act and Directive 2003/87/EC are the carbon emissions trading legal framework of EU. In the first and second operating stages of the EU carbon emissions trading, the European Commission gives members the right of self-determination, flexibility to system adjustment when designs the EU carbon emissions trading system, and focuses on connecting with other trading system. Based on the overall goal of reducing carbon emissions, mandatory emission reduction in the first and second stages within the EU carbon emissions trading system mainly drops on industries like electricity, heating, cement, oil refining and steel-making that consume large amount of energy, but not includes high carbon emission industries like traffic. Decentralized decision making is also adopted in the quota allocation of members. The allocation of carbon quota of enterprises mainly adopts the mode of free distribution with the guidance of grandfather principle. The subject matter can be traded within EU carbon emissions trading system includes not only the EU carbon quota(EUA) that enterprises obtains, but also Certified Emission Reduction(CER) based on program CDM and JI, and forwards, futures and options contracts based on the two subject matters. Participants of carbon emissions trading system can trade the contract goods above in European Climate Exchange, the European energy exchange, Nord pool and Blue Next etc. In the period of performance, monitoring, reporting and approval system based on mandatory emissions enterprises should submit EUA or CER equal to their actual carbon emissions, it must be submitted timely or be seen as breach of contract, which will face a fine of 40-100 euros per ton.As a pioneer of the carbon emissions trading system, the EU carbon emissions trading system has accumulated rich experience in actual operation and also exposes some problems. EU carbon emissions trading system promotes carbon emission reduction and the investment of low-carbon projects, and creates a new situation in the global carbon emission reduction and lays the foundation for the construction of the global carbon emissions trading system. However, the lack of efficiency in the free distribution mode of the initial quota of the EU carbon emissions trading system for the first and second stages, the unfair principle of grandfather guiding carbon quota allocation, decentralized mode of carbon quota among members triggers a contradiction. The defect of these quota allocating methods makes the supply and demand imbalance between the first and the second stage of the EU’s carbon emissions trading system, which leads to drastic fluctuation of carbon price. Therefore, the EU carbon emissions trading system expands the coverage of emission reduction and control range, adjusts the design amount of carbon quota and distribution method, slows down the shock of participant’s entry and exit to the emissions trading system so as to strictly control the offset impact mechanism and released the list of carbon leakage to guarantee the emission efficiency, in order to strengthen the supervision and management functions, and improves the carbon emission constraint and legal system. On the basis of the multivariate regression method, an empirical analysis to five reform methods that have been implemented shows the reform in October, 2010 that allows carbon emissions quota intertemporal trade and reform that decreases the upper limits of quota in 2013 will help smooth the carbon emissions trading price fluctuations. It is further proved that only by changing the supply side of the trading system and improving the flexibility of the system can help to promote the smooth operation of the market. EU carbon emissions trading system’s series of policies, played a role in promoting the development of carbon emissions trading system, and its reform process also provides a model for the improvement of carbon emissions trading system. EU carbon emissions trading system will commit itself to improving the flexibility and openness of the system, but its reform will continue to move forward in a dilemma. From the experience of operation and reform of the EU carbon emissions trading system, the Cap-Trade model of carbon emissions trading system contributes to the reduction, the reasonable carbon emission reduction targets and emission reduction range is the premise of the efficient operation of carbon emissions trading system. An fair, transparent and flexible carbon quota allocation mechanism is the key to the efficient operation of carbon emission trading system, perfect infrastructure is the basis of carbon emissions trading system’s efficient operation of the carbon emissions trading system, the perfect risk control mechanism is the guarantee to the efficient operation of carbon emissions trading system. Therefore, China should learn from the experience of the EU carbon emissions trading system based on China’s national conditions and the practice of the pilot carbon trading system, to build a unified national carbon emissions trading system. |
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