On Legal Issues Of International Carbon Trade

Excessive emission of Greenhouse Gas（GHG）has produced a very big negativeinfluence to climate change since the industrial revolution. To some extent, the actions againstthe natural laws threaten the survival and restrict the sustainable development of human kind.To solve these problems, since the execution of UNFCCC, all the countries from the globalworld are working together to find an effective way to solve the problems that caused byclimate change. Because of the existence of conflicting interests, especially the conflicts ofprotection of climate and economic development, different country takes different stance.Anyhow, confronted by the common serious problem, all the countries are active onenvironmental protection. As to the emission of GHG, the international community is tryingto establish some different trade systems. In the meantime, the occurrence of carbon trademarkets has made some impact on the various fields of international business law. The policyof China, as the biggest developing country, is becoming more active and clear. At the sametime, as a responsible country, we hope China play a greater role in solving the globalwarming. This dissertation focuses on the exploration of a suitable, native, concrete, andrevolutionary legal system.Apart from the introduction and conclusion, this paper falls into five chapters. In theintroductive part, the author focuses on the background and significance of subject, studyingmethod and the structure of this dissertation. In the conclusive part, the author summarizes hermain viewpoints. The body of this dissertation is divided into five chapters.Chapter I An Overview of the Basic Issues on International Carbon Trade is divided intothree sections. In Section I The Systematic Basis of International Carbon Trade, the authordiscusses carbon trade from the perspective of practice. In this section, author discusses thetrade types, the creation of carbon trade, and the legislations at international and regionallevels. In Section II The Theoretical Basis on International Carbon Trade, the author firstlyanalyzes the economic theoretical basis of carbon trade from different perspectives, such asinstitutional economics, transactional costs theory and welfare economics. Secondly, from theperspective of science of law, the author analyzes the legal theoretical basis of carbon tradebased on the law-economics and public trust theory. Thirdly, the author explains the socialbackground of carbon trade. Lastly, the author explains the political background of carbontrade, as carbon trade is more political than economical. In Section III, the Status Quo and Future of International Carbon Trade, the author analyzes the status quo of internationalcarbon trade, and summarizes two features: the market orientation of EU carbon trade and theweakening growth of carbon trade based on the programs. In the meantime, based on theconclusion, the author expects the future of the carbon trade market.Chapter II Legal Relationship of International Carbon Trade focuses on legal nature, thesubjects and objects of international carbon trade. Section I The Connotation and Nature ofInternational Carbon Trade focuses on the legal attribute and legal nature of internationalcarbon trade. The author maintains that the object of international carbon trade is a specialusufruct with the features of private right and public power. Section2The Legal Subject ofInternational Carbon Trade explains the connotation and denotation of legal subject, and itsclassifications. Section3The Legal Object of International Carbon Trade discusses theproperty right and object of carbon credit market. Carbon trade is a trade of emissionreduction; in essence, it is a transaction of right. And the continuance of the internationaltreaty in the carbon trade lead to the uncertainty of the trade and the policy risks ofcertification of emission reduction is an obstacle for the development of carbon trade. Afterthat, author discusses the issues on object of carbon trade based on the two types of carboncredit trade: trade based on quota and trade based on programs.Chapter III Legal Regulation on International Carbon Trade examines the importantlinks in the carbon trade system. This chapter is divided into three sections. Section I QuotaAllocation and License System analyzes two sides: the procedure of allocation and priceadministration. Then, author analyzes the allocation procedure from the key links: the way ofallocation, the standard of allocation and the deposit and overdraw the emission quota. Basedon that, author offers some advice. Firstly, when we set the controlling goals, we can do it intwo ways: absolute way and relative way. And secondly in the same time, we should put thebasic system into place. Thirdly, we should allocate the quota based on the reality. Fourthly,we should prevent the trade price from fluctuation. In Section II Certification System ofInternational Carbon Trade author firstly discusses the legal status and responsibility of thelegal entity in charge of certification. After that, author discusses the certification ofcompulsory emission reduction and voluntary emission reduction. In the compulsory type,author discusses the certification of EUA, CER and ERU. In the voluntary type, authordiscusses the certification system in Chicago Climate Exchange, as is a typical representativeof voluntary certification of emission reduction. Section III International Carbon Trade Registration and Settlement System analyzes the registration and settlement system undercompulsory trade system, under CDM, and under CDM in China, under the voluntary tradesystem and the settlement system of climate derivative trade. Besides, author discusses theissues on CCX registration system and LCH registration system in voluntary trade system.Chapter IV Legal Expansion on International Carbon Trade focuses on the interactionsof carbon trade from various perspectives of international economic laws. Section I CarbonTrade from the Perspective of International Trade Law focuses on the trade system of CDMtrade which has a distinctive feature of trade treaty. Section II Carbon Trade from thePerspective of International Technological Cooperation Law elaborates the technologicaltransfer in CDM trade from the perspective of international technological cooperation.Section III Carbon Trade from the Perspective of International Investment Law elaborates therelationship between carbon trade and investment from the perspective of investment fromdeveloped countries, and offers some concrete advice for Chinese enterprises. Section IVCarbon Trade from the Perspective of International Monetary and Financial Law analyzesthe relationship between economy and international finance and elaborates on the hot issuesand legal basis of carbon finance in CDM.Chapter V Creation of Legal System on Carbon Trade in China falls into four sections.In this chapter, author tries to find out a suitable way for China to develop carbon trade basedon the research on international carbon trade. Section I Legislation on Carbon Trade in Chinain the Background of International Carbon Trade focuses the legislative regulation. Section IIthe Macroscopic Creation of Carbon Trade System in China puts forward the guidingprinciples, construction mould and initial legislative system in China. Section III Meso-levelCreation of Carbon Trade System in China focuses on the legislative principles and legalduties, and enforcement of regulation on carbon trade in China. Section IV MicroscopicDesign of Legal System on Carbon Trade in China discusses the operational system onmanagement, license, allocation, trade, registration and settlement. A legal system on thequota allocation, trading market, financial market and registration and settlement shall beestablished.