Environmental Finance: A Tool For Environment Governance

Economic growth is the primary aim of environmental finance，while with thepurpose of global environmental governance points directly to the human and thenature on the basis of mutual benefit，the former is the existing research path whichused usually in environmental finance， compared with the latter was lessdiscussed.This paper locates environmental finance in a tool of environmentalgovernance，mining inner logic relation between environmental finance as a new thingand environmental governance，beyond to present the existing economic promotingfunctions. Research points from the conception， characteristics and types ofenvironmental finance to analysis of the theoretical basis and the relationships in thisfoundation forms including the subjects and legal values，legal principles，legalregulations and practices，predicaments and responses from law. All in all，toresearch relevant legal issues with this new creative environmental governance tool.From the perspective of law，especially environmental law，give more "environment"colour to environmental finance and more emphasis from the "financial" back to"environment protection"，make an expansion from economy to law with existingstudy. In order to make the goal more clearly，the aim of this financial mechanism isas the new tool for environmental governance to realize the sustainable developmentof human beings and the environment.This thesis firstly analyzes some related conceptions：environmental finance，green finance， carbon finance and their correlations， to summarize the basiccharacteristics of environmental finance， and made some classification formsaccording to the existing transactions. the connotation and denotation of "GreenFinance" significantly less than Environmental Finance，which includes but notlimited to investment financing， environmental trust fund and insurance，environmental capital securitization and environmental futures，options，and otherfinancial derivatives，"Carbon Finance" is an important part of the environmentalfinance，discussed as the most widely used financial field，it is a branch ofenvironmental finance extended from climate change. As a financial innovation withultimate goal for environmental protection and sustainable development，environmental finance has specific attributes and diverse forms，these can besummarized as the Equilibrium interests of economy and environment，strategic rationality，high-risk and international.According to decentralized management modeof financial institutions，different business types and capital flows，combined with theexisting environmental finance transactions，environmental finance trade forms can bedivided into the following categories：credit investment financing，environmentaltrust，environmental fund，environmental assessecurities，environmental insurance，environmental factoring and other structural financial products.The second chapter focuses on analyzing theoretical foundation. Environmentalvalue theory，currency environment value theory，environmental property righttheory，interest measure theory，environmental governance theory，the new publicservice theory is the theoretical foundation for research. Environmental governancehas been regarded as social and public welfare undertakings，which was not fully seethe economic value of environmental resources and property right，the value default isan important reason for environmental problems.Environmental finance reproducedthe environmental value，trading environment factors can be measured and directly tobe the money value，on the basis of property rights and emission rights theory，thevalue of environmental factors can illustrated by credit currency，securities，and otherquantitative forms，through financial market transactions to get economic value.Theessence of this transformation is profit from the behavior of energy saving andemission reduction，change the past profit model. The development of environmentalgovernance let people further thinking mutual relationships between government，market and civil society，from government "solo exclusive" to the government，market， public "three supports".The new public service theory in environmentalfinance decision-making and management reflects as the government only plays theguidance，to establish independent environmental finance，obtain its own risks ofmarket， to avoid the excessive administration intervention.The third chapter， function， value and mutual relationships whenenvironmental finance participate environmental governance. The essence is aninnovative way for environmental governance，thus to analyse the basic functions andcore functions; On the relationship between environment and finance，environmentalfinance and environmental governance can completely show interactions of financeand environment. The benign interaction and mutual combination can not onlyproduce the huge economic efficiency，bring new energy to the virtual economy，andalso reduce contradiction and conflict between environmental protection andeconomic development，to realize coordination of all kinds of interests with the ultimate goal of sustainable development of human and nature aswell as justice andfair development. There are two different research pathes：one is the development oflow carbon economy and the other is to participate in the environmental governance，through these research pathes to further summarize tool rationality and intrinsic valueof environmental finance，emphasizes fair justice and financial efficiency as its corevalues.Chapter four，financial and orientations of environmental finance. First to makesure the legal roles as it is an important part of any legal relationship. Environmentalfinance is a new legal act，its essence is market trading and the management behavior.The legal roles shall include transaction body， service body and regulatorybody.Transaction body is mainly refers to providers and users of environmentalfinance products on the market; The most typical service main body ispropertyexchange，In addition with financial brokers，relevant bank，futures market andauditing，accounting and law firms etc; Regulatory body is mainly refers to theadministration department of the government， mainly including the competentadministrative department of environmental and financial administrative department.Chapter five，legal regulations and environmental finance practice. This partdiscusses from international and domestic aspects. International law aboutenvironmental finance is mainly applied to international conventions，internationalpractice，international organization statements，trade self-regulating documents andenvironmental financial policy strategy and non-governmental international financialorganization s guild regulations rules and suggestions，etc. In addition to being widelydiscussed carbon financial transactions，International practice also mainly reflects insome international organizations such as the world bank set up the relatedenvironmental organization.This chapter also will use foreign and comparisonresearch methods，and details environmental finance legislation and practice in theUnited States and Britain. Policy is the main form and realistic requirement of China’senvironmental finance legislation，but these "policy" legislative level is low，thecontent in its defects and maneuverability is not good enough. In practical，ourcountry has being as many as100environmental exchange companies，compared toother environmental finance varieties，carbon emissions exchange is the largest andfastest growing one. But at present we have not given it commodity property status，and leck of carbon emissions right distribution mechanism. Environmental finance in our country has just started，there exists lots of problems as market size and functionare limited.The sixth part analyzes the difficulties for financial participation in globalenvironmental governance.Environmental finance in the global are facing with certaindifficulties. These difficulties mainly comes from imperfect legal basis，absence ofregulation，legal risks，non-synchronization of legal globalization and one country sfinancial supervision， etc. law plays a key role in the establishment of environmentalfinance system，especially in the developing countries where law is not sound of.Because of high cost for environmental protection and outlaw cost is small，theenterprise is not willing to accept any environmental protection investment， not evenenvironmental finance，thus led to the development of the financial environment inpause and helpless，hiting the enthusiasm of，financial institutions. So it is necessaryto break through and get rid of constraints to introduce incentive system and establishthe risk management system.The specific performances of environmental finance riskare business risk， entity risk and regulatory risk. Under the background ofglobalization and social responsibility investment，environmental finance supervisionremains state law product form，the formal international law is still absent. This causeapplicable international legal rules are only mainly from voluntary rules and other softlegal mechanisms，such as responsible investment principle，the equator principle，etc. These defect standard makes the executable environmental finance to sell at adiscount greatly.Chapter seven demonstrates environmental law s response to the environmentalfinance. From the basic theory of the existing system and environmental law to putforward the principles of environmental finance，system design for environmentalfinance to participate in Environmental governance to realize the sustainabledevelopment and evolutions of modern environmental law. Principles of law is thatfirst rule and the basis，which embody the basic spirit of the rules and valueorientation，through the integration of relevant legal departments of environment andfinance， mainly has the principle of national sovereignty， global cooperationprinciple，sustainable financial principles，the principle of responsible investment，security and the principles of fairness，information disclosure principle，these can beused as a legal control principles and could even become legislative principles for theindependent environmental finance law in the future. The system design inenvironmental finance mainly related to environmental finance market legal system， this part includes the establishment of legitimacy，responsible investment system，through the development of the financial market，the foundation to establish a modernenterprise system，financial market liberalization and multiple stakeholders graduallythe participation of financial market; The establishment of Environmental valueaccounting system; Under the fully considerations of sovereignty and nationalconditions to establish the democratic rules and procedures for building globalcommon governance mechanism，incentive interest mechanism and risk managementsupport. On the analysis of these principles and proposed systems， modernenvironmental law should carry out the step forwards from conflict to co-win，frommaintenance to creation，from managementto governance.