A Research On International Carbon Emissions Trading Market Under CDM

At present, as so many countries actively engage in carbon emission reduction activities, the market-drived carbon emissions trading market has become one of the effective means to reduce greenhouse gas emissions. Among the three flexible mechanisms proposed by the Kyoto Protocol, Clean Development Mechanism (CDM) is the only one which links the developing and developed countries to realize win-win. A research on market-operating mechanism, market-pricing mechanism and market performance is instructive in controlling risk and guaranteeing benefits for both parties of transaction. Meanwhile, it is of importance in guiding and establishing the framework of the scientific and rational rules of carbon emissions trading market.This paper dissects operating regulation of CDM market and explores the countermeasures of developing carbon emissions trading market in China based on the conditions of China by analyzing the operation mechanism of CDM primary market and price influence factors, price volatility characteristics of secondary market and market efficiency of the derivatives market with a view to the international carbon emissions trading market under CDM. The main research contents and conclusions are as follows:1. The analysis and summary about the current situation and operation mechanism of international carbon emissions trading market under CDM demonstrate that CDM is one of the effective means to reduce greenhouse gas emissions.2. The CDM secondary market is proved to be mature by empirical analysis of price influence factors, price volatility, market efficiency and so on which embodies:(1) Price formation mechanism has been formed in the CDM spot market which can be deemed to be an effective market.(2) The price of CERs in secondary market could reflect the supply and demand relationship of the CDM primary market.(3) Market-price discovery and risk aversion which are the two basic functions of the futures have been improved to function perfectly.3. The paper proposed the countermeasures of developing Clean Development Mechanism in China combined with Chinese national situation on the basis of mechanism analysis and empirical analysis of international carbon emissions trading market under CDM, which can be divided into two main areas:on the one hand, China, currently is the largest supplier of CERs in the world but lacking of carbon emissions trading market, in order to avert risks and make profits, China should actively participate in foreign carbon emissions trading market. On the other hand, it is necessary to make active preparation for establishing domestic CDM trading market in due time.4. The paper draws the development prospects of Clean Development Mechanism on the ground of the acute analysis of current international climate negotiations’ situation. Furthermore, the paper perfects Clean Development Mechanism against the limitations of it and advances to put forward the new Clean Development Mechanism.