The Research Of Carbon Finance Conducted By Domestic Commercial Banks

Global climate changes, environmental pollution and energy crisis are affecting the survival and development of mankind. The world must face serious challenges. Currently, the "green" whirlwind is sweeping the world, and saving the energy and low carbon environmental protection have become people’s everyday vocabulary and business Question. The development of low-carbon technologies has become one way to protect human ecology.In the future, the focus of national economic development will be concentrated in low-carbon economy.So there is a need to strengthen our low-carbon economy and speed up low-carbon technologies development and application.In the end of 2009, a climate conference was held in Copenhagen. This conference is of great influence. Low-carbon economy has become the consensus of the whole society:low-carbon economy, carbon finance and Equator Bank no longer just appear in scientific investigation or government documents. They have been closely related to ordinary business and persons.Commercial banks are important parts of the global low-carbon economy. China’s commercial banks occupy an important strategic position, its social responsibility demands it to support low-carbon economy. Commercial banks must keep up with economic and political trends, carbon finance strategy is the sole choice in the fierce competition among banks and is the best method to achieve their own development.This paper describes low-carbon economy and carbon finance and other terms. Then analyzes the development of carbon finance in the world, and concludes that it is necessary for China to develop carbon finance rapidly. By SWOT analysis, this article analyzes the strengths, weaknesses, opportunities and challenges of China’s commercial banks in the process of carbon finance. China’s commercial banks should seize this opportunity and develop carbon finance to enhance the level of participation and implementation in specific areas. The banks should introduce Equator Principles and publicize low-carbon economy through different channels.There are five parts in this article.The first part is a preface and the theoretical basis, it is mainly explaining for the background of the research. The global environment is been polluted. In order to save the world and human beings, we must adopt low carbon economy and thus financial needs turn up. The world should effectively cooperate and communicate in the same system so this paper also describes "Jingdong Protocol and other agreements and documents. Because of these series of agreements, countries or companies and ordinary people can deal with lots of economic and social problems at a stable mechanism. Carbon finance is based on sorts of theories which can provide theoretical support for the full text. This chapter describes some economic knowledge such as market failures and negative externalities and other concepts. Carbon finance isn’t only related to economics but also about energy economics and ecosystem and many other subjects. Therefore, it is necessary for us to learn economics, systems theory and energy economics to develop our low-carbon economy. There is great relationship between Finance and economics, financial industry does not only provide liquidity support for economic development, but also develop kinds of financial products to effectively stimulate the development of low-carbon economy, in the process commercial banks play a very important role. Currently, quota is of great importance to deal with emissions.The next chapter describes the current global carbon finance market, carbon finance originates in Western developed countries, so its carbon market is relatively mature. The author summarizes the features of the Western Carbon Finance as follows:relatively complete market mechanism, more market participants, diverse products and active market trading. Large amounts of data and examples cited can support these features.The next chapter concentrates on the practice of international banks in carbon finance. Now foreign commercial banks conduct carbon finance activities mainly in two ways:one is the traditional business, and the other is acting as intermediaries to obtain intermediate income. The author read much information and divide the participation of foreign commercial banks in carbon finance into four categories:middlemen to provide financial support to the customers, financial product designer, and Exchanges cooperator, provider of financial products about carbon emissions. The development of domestic commercial banks is relatively slow. Now Low carbon economy has been upgraded to the strategic level in our country so it is necessary to develop carbon finance for banks. This chapter details the conduct of commercial banks in carbon finance business, and introduced the present carbon finance situation.The last chapter is a key part of this paper, it analyzes the development of carbon finance, strengths, weaknesses, opportunities and challenges of commercial banks. This chapter points out that China’s commercial banks should vigorously carry out carbon finance. Then this chapter provides some recommendation to commercial banksI encountered many difficulties in the process of preparing this paper. Finishing the literature review took lots of time, due to carbon finance just develop in recent years, the process of collecting the data was not smooth sailing. Carbon finance is not only about economics knowledge, but also covers the energy, ecology, systems theory, environmental studies and other knowledge. So much knowledge brought much confusion for me in the process of writing the paper, however, it also made me learn more and understood my deficiencies. Because my understanding for the commercial banks and carbon finance may be quite superficial, there are some immature views, but I will continue to learn in the future.