The Study, Based On Strength Reduction Of Carbon Trading Market Mechanism

In the past century, the global climate is undergoing a significant change mainly characterized by global warming. Climate change has been one of the major environmental problems concerned by scientific community, governments and the public. Greenhouse gases, in particular, the rapid increase in CO2 caused global warming, which is related to the human activities of greenhouse gases emissions to the atmosphere directly or indirectly in the process of the production and life. For this reason, carbon emissions reduction activities have heated up around the whole world.At the call of the United Nations,《United Nations Framework Convention on Climate Change》and series of international climate negotiations results including《the Copenhagen agreement》put most countries in the world into the ranks of carbon emissions. Under the impetus of《Convention》, in particular《the Kyoto Protocol》, the world has given birth to a carbon trade market objected to the permits of carbon dioxide emissions, which is mature increasingly with the development of a few of main international carbon markets.As the largest developing country in the world, China has not be involved in the obligation of emissions reduction in the《Kyoto Protocol》.But it has become the largest CO2 emissions countries in the world. This makes China confronted with more pressure of carbon emissions reduction in the post-Kyoto era, and face great challenges in response to climate change issues. On one hand, China's economic growth stage has decided that the situation of more energy consumption and increased carbon emissions is difficult to reverse in the short term; On the other hand, the most current policies and measures in response to climate change and carbon reduction are mainly using the mode of "from top to down". Although it has achieved some carbon emissions effect, its defects and shortcomings also gradually reveal in the promoting process, and its loss in the efficiency of the carbon emission reduction can not be ignored; Moreover, the traditional policy under the control of total amount of carbon emission has largely restricted economic development. If a developing country in economic transition is carried out compulsory absolute amount of carbon reduction policies, its economic activity and social consumption will be imposed additional constraints inevitably, which will eventually lead to lower economic competitiveness and decline in social standards of living. Ultimately it will affect the good effects of carbon emissions reduction, so the policy can not achieve a satisfactory result.Therefore, how to reduce and control CO2 emissions in the cost-effective way, how to adopt effective adaptation policy within the limits of economic development, how to mitigate the adverse effects of climate change on China's economic and social development, and how to establish an appropriate national strategy to cope with climate change have been an urgent task placed in front of our government. This requires market-based instruments to play an important role, and need to build the market mechanism which is strong, healthy and suited with our administrative propulsion mechanism. And mobilize the whole society's enthusiasm to promote carbon emission reduction. Therefore, the environmental management mode of carbon emissions reduction requires the combination of governmental administration through "from top to down" and the market mode through "from bottom to up".Thereby it can explore more potential of voluntary emission reductions and achieve the purpose of low-cost carbon reduction.As a developing country, carbon emission reduction policies and measures adopted by our county should be carried through within the premise of unprejudiced to the economic development.Therefore, in the Copenhagen Congress, China put forward carbon intensity-based reduction target voluntarily:by 2020, CO2 emissions per unit of GDP will drop 40%to 45%compared with 2005. Under this goal, how to set up a carbon emissions trade market which is adapt to China's national conditions and based on carbon intensity reduction has become the focus of the research.This paper sorts out the literature in two parts. Firstly, sort the relevant exploration and practice of environmental policy responded to climate change and compare them. Carbon trade market policy can achieve better environmental management objectives. Secondly, sort relevant research on carbon trade market in domestic and international area, including the birth of the international carbon market, models of carbon trade market, birth of carbon intensity and carbon market research in China and so on, in order to lay a solid theoretical research basis for this paper.Research on carbon market mechanism in China need to analyze and measure the status of our current carbon emissions and carbon intensity goal firstly. This paper predicts the level of carbon intensity in 2020 in China through the use of ARIMA model, and then gets definite carbon intensity-based target according to target range, and calculates CO2 emissions reduction according to the quantitative constraint. Thus, it can be concluded that the pressure to achieve the policy objective of carbon reduction is enormous in China.The achievement of the target needs to establish mechanism which is suited with our administrative promotion mechanisms in order to promote carbon reduction with lower costs and higher efficiency. Adopting the way of market mechanism needs to set the carbon market trade scenarios in our country. By setting the cross-sectoral, inter-regional and cross-time carbon trade scenario, this paper tries to study the carbon intensity trade mechanisms based on the inter-industry transactions, inter-regional transactions and financial carbon trade mechanisms.In terms of inter-industry carbon intensity trade market mechanism, this paper decomposes the industrial carbon intensity factors into the rate of energy species, energy structure and energy intensity by means of decomposition. The paper studies quantitatively on carbon intensity of secondary industry and tertiary industry which account for a large proportion of national economy, and the 39 industrial sectors within secondary industry. The results show:the carbon intensity of the secondary industry is much higher than the tertiary industry, and differences of the 39 industrial sectors within secondary industry in carbon intensity are also very obvious. The two highest sectors in carbon intensity are "chemicals and chemical products industry" and "ferrous metal smelting and rolling processing industry". These are exactly the key industries which are needed for control. Therefore, this paper selects the steel industry, chemical industry and tertiary industry as the targeted industries in carbon intensity of inter-industry trade. Constrained by carbon intensity target, the paper is trying to establish inter-industry theoretical model of carbon intensity market by the way that the steel industry and chemical industry purchase carbon intensity index, the tertiary industry sales carbon intensity index. Finally, the paper analyzes the impact of carbon intensity of inter-industry trade to the economy, environment and society.It can conclude:in economic benefits, carbon trade has greatly reduced the costs and expenses of carbon emission reduction, so it can contribute to sustainable economic growth; in environmental benefits, carbon trade can make carbon intensity decline and can effectively resolve environmental problems; in social benefits, carbon trade can significantly improve the government's macro-control and the level of supervision and management, and improve environmental management efficiency. Finally, the policy recommendations in inter-industry carbon market trade are put forward.In terms of inter-regional carbon intensity trade market mechanism, this paper decomposes the regional carbon intensity factors into the rate of energy species, regional energy structure and regional energy intensity by means of decomposition. The paper calculates the carbon intensity changes on 30 regions in China, and attempts to divide the carbon emission region into low carbon emissions region, medium carbon emissions region and high carbon emissions region. This will form a base on carbon intensity target transferring from the region of high carbon emissions to the medium and low carbon emissions regions. In accordance with the flow direction of the carbon intensity, this paper sets up the model of carbon intensity index market:high-carbon region and medium-carbon region; medium-carbon region and low-carbon region; high-carbon region and low-carbon region. The results show that: declines on carbon intensity occur on both a single region and the social region. That is to say, CO2 emissions intensity has gained more significant effect of carbon reduction; the impact on the economy performs in its cost conservation, three scenarios of regional trade have gained greater cost savings. The difference between the single marginal reduction cost of environmental pollution greater and the cost of carbon saving potential greater, the possibility of carrying out carbon market is greater and the economic benefits of trade are higher. Finally, the policy recommendations in inter-regional carbon market trade are put forward.In terms of financial carbon intensity trade market mechanism, this paper introduces the financial mechanism into the carbon market model, extends the time of model from one phase to multi-phase. And this paper tries to establish a cross-time carbon credits trade system, and the current strength of the traditional carbon emission market trade model is extended. The paper designs two type of option mechanism model--call options trade carbon emissions model and put options carbon emissions model. Models' results show that choosing options tool to extend our traditional carbon market model can bring following impacts on carbon market development: trade costs have fallen, the carbon intensity also has descended, and has realized the flow of carbon intensity in diffident time; it enables manufacturers to effectively avoid the risk of carbon emissions trade; it increases the flexibility and maneuverability of the carbon trade market. Finally, the policy recommendations in the financial mechanisms carbon market trade are put forward.These three trade mechanisms can achieve carbon intensity-based market trade in China. The results show that the market trade based on carbon intensity index can bring us economic, environmental and social benefits.It can facilitate the reduction of carbon emissions and carbon intensity, simultaneously reduce carbon emission reduction costs and expenses, and further improve the efficiency of environmental management.