China's Carbon Finance Market Research

The emission of greenhouse gas by human beings has caused global warming. Although this conclusion is controversial, western countries, mainly those in European Union, guide the public opinion, and all countries in the world are preparing for reducing the emission of greenhouse gas to tackle global warming. In February2005, The Kyoto Protocol entered into force, which promote the formation of global carbon finance market, and lay down a brand new rule for greenhouse gas emissions trading among countries in the world. In the game of global carbon emissions, all countries are making plans accordingly in the hope of occupying larger market share in international carbon finance market in the future.As the largest country of greenhouse gas emission, China can participate in the carbon finance market by means of Clean Development Mechanism. China possesses nearly half of the CDM market share, and enjoys huge development potential in the future. By researching of international carbon finance market, we can be aware of China’s position in carbon finance market and analyze problems exist in current carbon finance market, and pose the future development path based on such analysis.This thesis mainly consists of five parts as follows:The first part introduces the background of the emergence of carbon finance market; analyzes the theoretical basis of carbon finance market, which is discussed from aspects of Coase property rights theorem, Externality theory and Pigovian tax; and gives brief description of main content and research method of the thesis.The second part analyzes the international background of the carbon finance market. It starts from the stakeholders in the carbon finance market. By analyzing the current development status and strategies of carbon finance market in the European Union, the United States and Japan, it makes prospects of the development of international carbon finance market in the future. The international carbon finance market will experience its winter until2013; however, Post-Kyoto carbon finance market will still exist.The third part explains the current development status of the carbon finance market in China. It analyzes the necessity of development of carbon finance market in China. At present, China’s carbon finance market is still in its infancy; CDM market has been built initially; Beijing, Tianjin and shanghai has established the Environment Exchange; and Carbon Fund has just been found. Chinese government has begun to attach importance to carbon emission trading, and carried out experimental work in seven provinces. It has been expected that carbon emission trading market can be gradually established during the "12th Five-Year" period.The fourth part analyzes problems in China’s carbon finance market. China should be aware of its position in carbon finance market. As a game developed by Western countries, the essence of carbon finance market is to grab wealth by use of Virtual financial derivatives. In addition, the pessimism of foreign buyers, changes in the EU ETS and the United Nations EB rules of the carbon finance market also make a great impact on China’s carbon finance market. Besides, problems exist in the process of China’s corporations’ participation in CDM market, as well as Intermediary service organizations.The fifth part brings forward the path to develop the carbon finance market in China. It firstly establishes the development principle of carbon finance market. By learning from the European Union and India’s development experience, and aimed at the problems of China’s carbon finance market, it states that the Chinese government should enhance the construction of regulations, be aware of its position, and design a rational mechanism to build carbon finance market from a specific area of industry-specific pilot, and develop laws and regulations to ensure the operation of market. In the future carbon finance market of China, corporation should make preparation in advance, and Intermediary service organizations should perfection their services.