Research On The Development Level Of Carbon Finance At The Provincial Level In China

The carbon finance market has been developing rapidly since "the KyotoProtocol" went into effect. China is the main supplier of CDM program and thecarbon demand is huge. China has already started low-carbon pilots in eight cities offive provinces and established dozens of exchanges to help companies carrying outCDM program as well as the attempt of reducing the emissions voluntarily. However,the practice of carbon finance is only at the surface and current carbon exchanges andother financial institutions have no result. It is urgent to study the currentdevelopment level of carbon financial, analyze the stage characteristics in the carbonfinancial development process and identify the factors that affect the developmentlevel of carbon finance in China. After literature review, we present the implication ofthe carbon finance development, analyze the characteristics of the carbon financedevelopment from macro, metro, and micro views. Based on this, we select threeindicators to measure the development level of carbon finance. It shows an upwardtrend of the development of carbon finance, but the differences between variousregions are significant; national and regional development policies have an importantinfluence on the development of carbon finance; most provinces in China are still at avery low development level of carbon finance, so there are still large room forimprovement; there is a relationship between the development of financial and thedevelopment level of carbon finance, but the development of financial is not the sameas the development level of carbon finance.In addition, the factors that may affect the development of carbon finance areidentified in this paper based on the panel regression model. The empirical resultsshow that: from2007to2009, industrial restructuring, innovation, level of cleanertechnology, and policy incentives have positive impacts on the development of carbonfinance, and the change in energy intensity has no significant effect. The developmentof carbon financial is significantly affected by the adjustment of industrial structureand policies. Based on the construction of panel regression model in different regions,we can conclude the reasons of unbalanced development level of carbon financial inthe eastern, central and western: the factors that affect the development level ofcarbon financial in the eastern area are industrial restructuring, technologicalinnovation capacity and policy incentives, and the main factors is the adjustment of industrial structure and policy incentives; the factors that affect the development levelof carbon financial in central region are the change of energy intensity and the levelof clean technology, and the change of energy intensity is the main driver; the factorsthat affect the development level of carbon financial in western region are theadjustment of industrial structure, technological innovation and clean technologylevel, and the main driver is the adjustment of industry structural.