Study On Carbon Finance Developed By Commercial Bank Of China

ABSTRACT:With the increasing participation of carbon trading among countries and international organizations, carbon trading market experienced a rapid expansion. Varieties of carbon trading have been increased, structure of transactions have become more complicated. Therefore, financial activities following the massive increase in carbon trading drew more and more attention of the world economy. As a member of the developing countries, China has not been enforced on obligations for carbon emission reduction, and has not been involved in carbon trading market as the subject of the state. However, China has long been actively engaged in the the Clean Development Mechanism (CDM) projects, and became the biggest seller of the global the Certified Emission Reduction(CERS) standard. Unfortunately, the financial services that commercial banks of China could offer to the carbon trading activities are relatively underdeveloped, they have been limited on bank loans and the CDM project financing etc. To improve the competitiveness of China carbon trading activities in the world market, the paper study the carbon trading mechanism by using the method of combining empirical analysis and normative analysis, to understand the financial development trend of carbon trading activities, and especially to search for opportunities and to define challenges that China commercial banks face. The comparative analysis is also adopted to discuss real cases of carbon trading activities from the Bank of America, the ABN Bank and some other global commercial banks. And finally, the paper presented six financial services that China commercial banks may provide for the carbon trading activities.