A Comparative Study Of The Carbon Trading Market System

Carbon trading is a comprehensive issue, related to environment, technology and economy. Ecologically, the emission of greenhouse gases especially carbon dioxide leads to global warming under a runaway greenhouse effect. Economically, carbon emission permit has become one of the world’s commodities. With its value regularly hitting new highs, the world’s carbon-permit trading market has become the global energy market which exerts an influence on the international political and economic pattern. Therefore, it is an inevitable choice for each responsible country to develop carbon reduction methods and establish a unified national carbon trading market system.This paper will focus on the comparative analysis of carbon trading market systems. The comparative analysis includes the foundation, the structure, and the running condition of carbon trading market system and provides the beneficial reference to establish carbon trading market system with Chinese characteristics.First of all, this paper makes a summary of emission theory, theory of low-carbon technologies and technology transfer theory, as the theoretical basis of carbon trading. On the other hand, the international community has achieved a certain degree of consensus to fight against the greenhouse gas emissions, and put them into action. Among them, the United Nations framework convention on climate change, the Kyoto protocol and the conferences of the parties held every year since1995make substantive progress. In fact, the effort, commitment and cooperation of the international community, is a realistic foundation of carbon trading.Secondly, carbon trading market system includes the carbon-permit trading market and the low-carbon technology trading market. The carbon-permit trading market can be divided into mandatory cap-and-trade market and voluntary emissions trading market in accordance with the mandatory reductions in carbon emissions. Similarly, the international low carbon technology trading can be divided into voluntary and compulsory types. Political-economic analysis framework is applied to analyze the formation mechanism of different types of trading markets. CDM project contains both technology and permit trading. It is the intersection of the carbon-permit trading market and the low-carbon technology trading market. The carbon trading market system need to be further subdivided in the future, in order to highlight the great influence of the CDM project.Thirdly, this paper discusses how low-carbon trading market and carbon-permit trading market operate with evaluation standard of the size, efficiency and emission reduction effect. In conclusion, whether in the low-carbon trading market or carbon-permit trading market, without the government’s mandatory target, the effect of voluntary emission reduction market is very limited. Voluntary emission reduction market is more suitable as a supplementary part for the mandatory market, playing a supportive role.Finally, this paper aims at the shortcomings of the system development of carbon trading market in China, such as the lack of theoretical research, the CDM projects which are inadequate in the quantity and low in quality, the carbon-permit trading pilot dispersion, etc. This paper puts forward the corresponding policy recommendations, and establishes a carbon trading market system with Chinese characteristics, in order to promote the environmental construction and economic development of our country.