Research On The Price-fixing Mechanism Of Carbon Finance In China

With the world-wide implementation of Kyoto Protocol, the conception of market mechanism has been applied in the field of the global low-carbon economy to address the critical issue of greenhouse emission. Therefore, a new market of emission permits trade of carbon has formed its shape, emission permits trade of carbon market and the relevant financial activities serving for this market all together consists of carbon finance. China presently plays the most important seller's role in the above market; however, domestic carbon financial market is still at the budding stage; especially, in terms of price-fixing mechanism, we are still in the shortage of resources and its construction. Therefore, there is an urgent call for an in-depth study of price-fixing mechanism for carbon finance in China.The current paper has employed the researching method of integrating theory with practice. Specifically speaking, the article first has provided a detailed analysis of Coase theorem; based upon the major characteristics of carbon trade, the article claims that this trade follows Coase Theorem; in this sense, the environmental problem of carbon emission has been converted into an economic problem or financial issue. Secondly, the article proposes that Financial Derivative Market plays a critical role in correcting and switching the Underlying Assets market; with the evidence of the relationship between B-S model and EU quota, the article has laid a concrete foundation for financial derivative market in China.The current paper has arrived at the conclusion that a complete carbon-finance price-fixing mechanism should contain a fully-featured trading platform, a scientific trading system, active market participants, a set of fair price-fixing system and effective political inspection and supervision. Furthermore, the article analyses the current carbon finance price-fixing mechanism in China and searches for existing major problems and the causes that lead to these problems. Finally, the article has come up with three suggestions concerning the development of price-fixing system in china. Firstly, a specific emission trading market should be built based upon the current situation of China; secondly, a united legal system should be built to regulate the current market; thirdly, reinforcement should be provided by relevant organizations to set up carbon finance price-fixing mechanism; fourthly, Financial Derivative Market should be greatly developed; lastly, further exploration of scientific price fixing. To sum up, this article aims at providing incentive for China to form a scientific carbon emission price-fixing system. Key words:Carbon finance Price-fixing mechanism Emission permits Market mechanism...