Legal Preventions Of Carbon Financial Risks In China

Since climatic deterioration affected human’s survival and development seriously, international community and countries have taken various measures to response to the change of climate; the development of low-carbon economy has become an inevitable choice. Carbon finance developed on the basis of international laws and policies, the United Nations Framework Convention on Climate Change determined the tradability of the carbon emissions right, Kyoto Protocol formulated the International Emission Trading, Joint Implementation and Clean Development Mechanism, which gave birth to the carbon financial market. China is the largest supplier in the CDM market, which has a huge potential of the development of carbon finance. Carbon finance has become an important opportunity for the development of clean energy, the adjustment of industrial structure and the transformation of economic development. At present, China has promulgated a series of legal documents related to carbon finance, and set up seven pilots of carbon emissions trading; financial institutions have also launched the green credits, green securities business to support the development of low-carbon economy. However, because of the constraint of the economic structure, the lack of mature understanding of carbon finance, the incomplete legal system, regulatory system and incentive mechanism, there are still many carbon financial risks in China. It is significant to reinforce the legal preventions of the carbon financial risks.This paper is divided into four parts. The first part introduces the implication of carbon finance, the development and classification of carbon financial market, the implication and classification of carbon financial risks and the implication of carbon financial risk preventions. The second part discusses the carbon financial risks and the problems of risk preventions in China. These risks include policy and legal risk, market risk, project risk, credit risk and operational risk. These problems involve in legal system, supervision system, accountability system and the incentive mechanism. The third part introduces the carbon financial risk preventions in the European Union and the United States, including carbon financial legislation, registration system, carbon emissions monitoring system, carbon disclosure system, third-party certification system, supervision and accountability system, incentive mechanism, and summarizes the revelation of the legal preventive measures. The fourth part proposes a solution in the legal preventions of the carbon financial risks, which includes the formulation of Act To Address Climate Change, the establishment of carbon emissions trading and financing laws and regulations; the improvement of regulatory system, the usage of registration system and carbon identification system, the improvement of carbon emissions monitoring system and carbon disclosure system; the regulation of responsibilities of authorities, financial institutions, and businesses; the increase of financial support, tax incentive and policies support.