Research On The Influence Mechanism Of China's Carbon Trade Price

With the constant study of climate change, greenhouse gas emissions and the associated policies won more and more concern among governments and interest groups. The era of cheap energy was replaced by the era of low-carbon economy. Behind the low-carbon economy is the huge economic gains and losses, also changes of international status. It needs joint efforts to combat climate change, but it is also a stage for new economic game among different countries.The hinge to solve climate change is to establish carbon price signals and markets through building appropriate mechanisms, making the carbon price reflect the external costs the enterprises and individuals should bear and the economic value of carbon emissions reduction, then leading to low carbon production and life. In the development of low-carbon economy, fighting for the pricing power is very important for optimal allocation of resources.Carbon-trade mechanism, based on "cap and trade" model, is a method to realize the greenhouse gas emission reduction using economic instruments. Since China proposed the greenhouse gas emission reduction targets in Copenhagen, domestic demand for the carbon trade mechanism urges a lot. There are two aims:to obtain the pricing power and the initiative to allocate resources in low-carbon economy; to guarantee the industrial competitiveness and the economic vitality in long term. Therefore, carbon-trade mechanism needs to balance market efficiency and industrial competitiveness, which means that the price formed by the mechanism should be effective, reflecting the market supply and demand exactly, and also to protect industrial competitiveness when making relevant policy.According to the foundation above, this paper comprises five chapters. Chapter one is the basis to start the discussion, it explained the background and significance of the theme, and then settled down the research mentality in basis of the review in this field, it pointed the possible innovations. Chapter two and three discussed which factors affect carbon-trade price and how they make impacts. Chapter two judged that the carbon quota-based trading mode will replace the project-based trading mode in the main analysis of China's low-carbon economy mode, so this paper studied deeper in quota-based trading model. Then theoretically discussed the market efficiency and believed that carbon-trade is easier to guarantee than carbon-tax. Chapter three proposed some characters of China's carbon-trade market in practical, and made a conclusion that the market structure, especially market power, put an intensive impact on market efficiency and downsizing the carbon-trade market. The initial allocation of carbon is the key of market efficiency, the current carbon emission rights for free distribution carbon in China lowered the market efficiency and the effectiveness of carbon trade price.Chapter four discussed how the carbon-trade mechanism put impact on industrial competitiveness from the type of industry, industry position and industry chain position, and obtained three conclusions:(1) energy industries are important participants in the carbon trading market and more sensitive to carbon price, carbon trade price impacts the energy industry sector operating costs directly, but may be favorable to the others'development. (2)The impact carbon trade price put on different companies is different. Market forces, strong advantages of capital and advanced technology could lower the depression of industry leaders; as a recipient of the price, carbon trade price will be an important part of the cost structure of industry followers, and weaken their competitiveness to some extent. The effect of profit reduction by carbon price increases is more difficult to transmit to the downstream industry chain. The impact carbon trade price put on the industrial competitiveness is greater among upstream energy industry than the downstream. For the industry leaders in upstream, the impact of carbon prices on the competitiveness is uncertain, that depends on the prorate action. For the industry followers in the upstream, carbon trade price will weaken the market competition force because carbon trade price constitute an important cost in the upstream industry chain as a price taker on the market. Chapter 5 proposed some suggestions. According to a brief summary of the international carbon market, this paper was inspired to imply that it needs to solve three problems to establish the carbon trade mechanism:(1) to stimulate enterprises to participate in the trading market momentum and form the market demand of carbon trade; (2) establish a carbon trading market to run a unified platform to develop standards subject of the transaction; (3) carbon trading system to support risk control as well as supporting the construction. Section two of this chapter started to propose recommendations. Legislative measures and economic instruments can be used synthetically to explore the market demand, in order to form the mandatory emission reduction market gradually and expand the carbon trade market, then made a initial judgment and distribution of the stage of the carbon market development. Then it made recommendations to run the carbon trade mechanism through four aspects of initial distribution, transaction subject of standards, building a unified trading platform and a verification mechanism. Finally, it proposed to establish a support system in the way of building information systems, developing carbon finance, promoting applying low carbon technology.The possible innovations are:(1) based on the study of domestic status of carbon trade, this paper stepped further in the analysis of the impact of the market structure put on the carbon trade price and the impact the carbon trade price put on the competitiveness of different industries. (2) Firstly combined the market structure, market forces, industry type, energy consumption, industrial chain and other factors for a depth research into the carbon credits on the operational level, and provide a practical basis for the carbon trade mechanism.Domestic researches in carbon trade mechanism are in progress in all aspects, on one hand we should summarize and learn from foreign experiences in the development of carbon trading mechanisms, on the other hand we must explore a low-carbon economic path adapt to domestic conditions of China with international standards based on the actual conditions.