China's Carbon Finance Market Research

Carbon finance originates from international agreement. It is an applicance of economic method to reduce greenhouse gases effectively. From economic perspective, carbon finance is a new financial system that germinate with low carbon economic development. Facing challenges of global warming, the world requires not only global governance and cooperations, but also capital support. Such developments provide new opportunities to commercial and financial sectors. Since traditional financial theories and practices no longer satisfy new era of low carbon economy, it requires new innovations on financial system to serve the development. On this aspect, foreign countries have proceeded research and massive practices. Among these, the practice of carbon finance is the most outstanding. In overseas, it includes not only establishing effective mechanism to encourage financial insititutions to participate in carbon finance development, but also develops a relatively mature carbon financial market. Comparatively, the development of carbon finance in China lags behind. Although the carbon financial market has hugh potential, research on such development lacks academic attention. At present, most research on carbon finance only focus on developing CDM under existing framework of carbon finance. This essay studies how to develop, not only the existing CDM section, but more comprehensively, a nationalwide carbon financial market and the role and development of national financial institutions in this market, through analyzing development of carbon financial market in Europe and America, their strengths and weaknesses. This research aims at breaking away the binding of existing framework of carbon financial market, and China's passive position in worldwide carbon financial market as a latecomer.