Research On The Determinants Of The Operational Effect Of China's Greenhouse Gases Voluntary Emissions Reduction Mechanism

The Industrial Revolution has accelerated the development of human society,and because of the poor environmental governance,the concentration of Greenhouse Gases(GHGs)such as carbon dioxide in the atmosphere has risen sharply.The increasing emissions of carbon dioxide has caused a serious greenhouse effect,resulting in an increase in earth surface temperature,causing significant changes in the global climate and deteriorating ecological environment.The impact of global climate change on the natural environment and human society cannot be ignored,meanwhile global issue of climate governance has also received increasing attention from the international community.In 1997,the United Nations Framework Convention on Climate Change issued an important legal agreement,the Kyoto Protocol,requiring countries to assume “common but differentiated responsibilities”.The Clean Development Mechanism(CDM)is one of the three flexible mechanisms stipulated in the Kyoto Protocol.Under the operation of this mechanism,Annex I countries(with emissions reduction obligations)can develop GHGs voluntary emissions reduction projects in non-Annex I countries(without emissions reduction obligations)and obtain “Certified Emission Reductions”(CERs)to complete their emissions reduction obligations.This mechanism can help Annex I countries achieve low-cost emissions reduction,and at the same time,it also can promote countries and regions without mandatory obligations to participate in global mitigation actions through voluntary emissions reduction,where the concept of voluntary emissions reductions comes from.The CDM has achieved outstanding results in China,with China's projects accounting for about half of the total of 7807 CDM projects worldwide.With the increasing awareness of combating climate change in China's government,in June 2012,the China's National Development and Reform Commission issued the Interim Measures for the Management of Voluntary Emissions Reduction of Greenhouse Gases,and formally established a local voluntary emissions reduction mechanism in China,and until now the Chinese Voluntary Emissions Reduction Mechanism has successfully completed 2,891 China Voluntary Emissions Reduction projects.And under this mechanism,these projects can produce the Chinese Certified Emissions Reductions(CCER).At the same time,the construction of China's unified national carbon emission trading market is also actively promoted.According to official estimates,the Chinese market will become the world's largest carbon market covering 3 to 4 billion tons of carbon emissions allowances,and its market size is expected to reach 120 billion yuan,if considering futures and other financial derivatives,the number can reach 500 billion yuan.According to the current rules of carbon trading pilots,CCER enters the allowances market with a proportion of 5-10%,China's CCER market will reach 60-500 billion yuan,and the number of employees will reach hundreds of thousands.Although the operation of the GHGs voluntary emissions reduction mechanism in China has achieved positive results,these operational effect has not been optimized in terms of cost,technology,fairness and regulation.At the same time,with the promotion of the national carbon market construction,it also put forward higher requirements for the operational effect of China's GHGs voluntary emissions reduction mechanism.Therefore,how to further improve the operational effect of China's voluntary GHGs emissions reduction mechanism has become a significant and realistic issue that we need to solve urgently.Obviously,in order to solve this problem,it is necessary to clarify what factors constitute the operational effect of China's GHGs voluntary emissions reduction mechanism.On the other hand,through the investigation of relevant literatures at home and abroad,it is found that although domestic and foreign scholars have always paid close attentions to the applications and practices of GHGs voluntary emissions reduction in China,most of the literatures is focused on the research of the CDM.And only a few studies are related to the research on China's GHGs voluntary emissions reduction mechanism,and there is a clear academical lack on the factors affecting the operation of China's GHGs voluntary emissions reduction mechanism.Based on the above-mentioned realistic needs and the gap of academic research,this thesis puts forward the topic of research on the determinants of operational effect of China's GHGs voluntary emissions reduction mechanism.The purpose of this study is to clearly answer the question of what factors affect and how to affect the operational effect of China's GHGs voluntary emissions reduction mechanism and focus on providing a theoretical basis for further policy design to improve this effect.The theoretical significance of this research lies in: Based on China's conditions,this thesis takes China's self-established GHGs voluntary emissions reduction mechanism as the research object of this study,and empirically analyzes the determinants of the operational effect of China's GHGs voluntary emissions reduction mechanism.An analytical framework for studying the determinants of the operational effect of China's GHGs voluntary emissions reduction mechanism is initially constructed in this research.And this thesis preliminarily reveals the path principle of using Environmental Economics,Ecological Compensation and other theories to analyze the determinants of the operational effect of the China's GHGs voluntary emissions reduction mechanism and has played a certain role in enriching the content of the related theory.The practical significance of this research lies in: As the Chinese government's thinking on the construction of ecological civilization is constantly enriched and improved,the construction of ecological civilization is one of the overall layout of the “Five in One”;adhering to the harmonious symbiosis between human and nature is one of the basic strategies for developing socialism with Chinese characteristics in the new era;green development is one of ideas in the New Development Concept;pollution prevention is one of the “Three Major Battles”.This four “one of” reflect the great importance the Chinese Communist Party and the Chinese government attach to the construction of ecological civilization in China.China's GHGs voluntary emissions reduction mechanism,as a market-based mitigation tool,is an important way of climate governance to control GHGs emissions and promote ecological civilization construction in China.Undoubtedly,this study is highly compatible with the practice of ecological civilization construction that China is actively promoting.Based on the analysis of the existing related literature,this study will be conducted by the following logic: First,combined with Environmental Property Rights Theory,Emissions Trading Theory,Comparative Advantage Theory and Ecological Compensation Theory,this study clearly defines the concept of the operational effect of GHGs voluntary emissions reduction mechanism.Second,this study exploratively puts forward the theoretical model of the determinants of the operational effects of the GHGs voluntary emissions reduction mechanism in eight factors(power consumption,economic level,technology level,human capital,financial support,foreign investment,policy design and offsetting market),and analyze the acting mechanism of these main factors from a theoretical perspective.Third,this study elaborates the operational status and existing problems of the domestic and international GHGs voluntary emissions reduction mechanisms.Fourthly,this study employs the Negative Binomial Panel Data Model,Tobit Panel Data Model and Structural Equation Model to run an empirical analysis on the effect of CCER project quantity,CCER project emissions reduction and CCER project owner satisfaction respectively.Moreover,this study ingeniously applies Hierarchical Linear Models to the empirical analysis of the factors affecting the emissions reduction of individual CCER project.Finally,through the above research process,the study gradually answers all the research questions,draws the research conclusions,and proposes the corresponding recommendations.Through theoretical analysis and empirical test,the thesis draws the following main conclusions: First,from the perspective of factors such as power consumption,economic level and technological level,China's GHGs voluntary emissions reduction mechanism can achieve better operational results in areas with higher mitigation potentials;Second,financial support will play an important role in the operation of China's GHGs voluntary emissions reduction mechanism,but the impact from human capital is not significant;Third,foreign investment factor is no longer significant,indicating that China's voluntary emissions reduction mechanism has been basically freed from the impact of the Clean Development Mechanism and has formed a gradual autonomous operation.Fourth,the impact of the carbon offsetting market is not obvious,indicating that the carbon offsetting policy has not yet played sufficient supporting role in the operation of China's GHGs voluntary emissions reduction mechanism;Fifth,CCER project owners give priority to market and policy factors in project development.Based on the above conclusions,this thesis proposes the policy recommendations as follow.First,we should rationally guide CCER project development according to local conditions to improve the operational effect of China's GHGs voluntary emissions reduction mechanism;Second,we should enhance financial support for the operation of China's GHGs voluntary emissions reduction mechanism to expand the financing channels for CCER project development.Howver,the influence of the human capital factor is insignificant;Third,we should improve the construction of carbon offsetting market to strengthen its support for the operation of China's GHGs voluntary emissions reduction mechanism;Fourth,we should improve the top-level policy design to encourage more enterprises to participate in the action of China's GHGs voluntary emissions reduction.The main innovations of this thesis are: The first innovation is our research object,which focusing on the determinants of the operational effect of China's domestic GHGs voluntary emissions reduction mechanism;The second innovation is the theoretical framework,which deeply analyzes the theoretical basis and acting mechanism of eight factors affecting the GHGs voluntary emissions reduction mechanism in China;The third innovation is the empirical method,Hierarchical Linear Model is used in the empirical study to analyze the factors affecting the emissions reductions of individual CCER project;The fourth innovation is our conclusion,the study draws different conclusions from the existing literature on the insignificant results of the two factors of foreign investment and human capital.The potential shortcomings of the thesis are as follows: First,the time span of empirical panel data is limited.This is because the development time of China's GHGs voluntary emissions reduction mechanism is short,which leads to certain limitations of CCER project data.Second,we have not included CCER price factors into research.The main reason is China's carbon market started late,CCER transaction data is lacking,and their price signal has not fully exerted its regulating role of market forces.Therefore,it is hard to involve the price factor into our the empirical test.