On The EU Greenhouse Gases Emissions Trading Scheme Legislation

The thesis chooses the legislation of the EU greenhouse gases emissions trading scheme (EU ETS) as the research object, analyzes and discusses the legislative background, framework and content of the EU ETS, and further puts forwards suggestions on the greenhouse gases emissions trading legislation in China.The research angle of the thesis is to consider law as one of approaches that government could employ for environmental management. After the environmental objectives have been set, government could use such tools as policy, law, economics and technology to achieve the environmental objectives already set. In the field of fighting against climate change, the ultimate objective of applying emissions trading is to reduce greenhouse gases emissions at a cost-effective way, and law should promulgate the emissions trading rules to help government achieve the objective at the most. Therefore, the thesis takes the legislative perspective to study how the emissions trading rules should be set.The research methods employed in the thesis includes history analysis, analysis of legal provisions and comparative study. History analysis is used when discussing the legal background as well as the evolution of the legal rules of the EU ETS; While discussing the legal design of main components of the EU ETS, provisions of the related legal instruments are analyzed in detail; In order to learn the experiences and lessons of the EU ETS and put forward the suggestions for the China, a comparative study of the relevant scenarios between EU and China is conducted.The conclusions of the thesis are as follows:first of all, China could learn the experiences from EU ETS with regards to legislation approach and research. EU has adopted a "learning by doing" approach during the EU ETS legislative process, which not only helped EU win the support from Member States, private sector and NGOs to establish the EU ETS in a short timeframe, but also consistently improve the ETS through accumulating experiences and lessons of the ETS implementation and amending the legal instruments accordingly. China should take this approach as well, by first establishing a simple demonstration scheme in a certain administrative area, and gradually exploring the feasibility of the establishment of a bigger emissions trading scheme.As for legislation research, China should consider taking the EU approach as well. It means to build a research platform, which could get all the stakeholders including various government agencies and private sectors involved in the research process, to conduct scientific and systematic research on greenhouse gases emissions trading, and to figure out what a role emissions trading should play in China in terms of fighting against climate change among all the measures.Next, with respect to legal design of the greenhouse gases emissions trading scheme rules in China, the following points should be considered:Firstly, a cap-and-trade management model should be applied to ensure more certainty of the achievement of environmental objectives compared to under the baseline-and-credit model. Secondly, taking into consideration of the absolute big proportion of CO2 emissions of the industrial sector in the total greenhouse gas emissions in China, and the energy conservation potential of the industrial sector as demonstrated by the "1000 Enterprises Energy Conservation Action Plan", China could select CO2 and industrial sector as the priority greenhouse gas and activities to participate in the demonstration scheme. And for industrial sector, "downstream" activities should be selected instead of "upper stream" activities in order to avoid the negative impact on the entire economy, which would be caused by the higher energy cost should "upper stream" companies join the emissions trading.Thirdly, as for allowances allocation, efficiency should be the principle to follow when the scheme starts off, and thus free allocation should be taken to reduce the opposition from the private sector. After the scheme runs mature, equality should become the priority principle, so auction should be used to allocate the allowances to protect the fair competition between sectors and companies.Fourthly, government role should be rightly positioned in the emissions trading, in order to reduce trading cost. A balance need to be found between a totally free trading of the EU ETS, and the government-supervision-oriented trading currently existing in China for SO2 and COD emissions trading. It would be a challenge for the China government to figure out an appropriate way to supervise the Chinese companies with a bad record of their credibility, and in the meantime without jeopardizing the original meaning of applying emissions trading-a market-based approach.Finally, to stimulate low-carbon technology advancement, China could keep using the 2 approaches that have already been implemented in the SO2 and COD emissions trading in China, which are respectively, to directly encourage or restrict certain sectors to get allowances by legislation, and to buy back the left allowances upon companies closure to make laggard companies be willing to leave the market. In the meantime, government should set reasonable guidance carbon price, and appropriate trading period, so that a stable carbon price could be formed and kepted.