The Carbon Emissions Trading Mechanism Of Hubei Province

Under the background of global climate change, China is facing enormous pressures from international climate charging and domestic economic development and greenhouse gas emission reduction. In order to control the greenhouse gas emissions, China has put forward to build a carbon emissions trading mechanism and carbon emissions trading market, and Hubei province is one of the first seven carbon emissions trading pilot cities.Based on the theory of carbon emissions trading mechanism, this paper has discussed about the carbon emissions trading mechanism of international and domestic as well as Hubei Province. And then this paper has calculated the carbon dioxide emissions of Hubei province, also discussed the details. After that, this paper has tried to build a carbon emissions trading mechanism on six main parts of Hubei province:trading agents, trading objects, cap and trading, initial allocation, trading in the market, and regulatory, and to give some suggestions. This paper has concluded that:1. The total carbon dioxide emissions of Hubei Province is150.274million tons in2005,and rises to245.0938million tons in2010, with an annual average growth rate of10.28%.The secondary and tertiary industry have the most greatest impact on the carbon dioxide emissions, the shareof their carbon dioxide emissions gets close to90%.The carbon dioxide emissions of the secondary industry is highest, but with a downward trend; the carbon dioxide emissions of the tertiary industry is far lower than the secondary industry, but it is significantly growing with a rate of12.84%,the secondary industry growth rate is9.27%.2. Hubei province will build a compulsory carbon emissions trading mechanism based on quotas, and it will be achieved with three stages. The first stage starts from2013to2015, the second starts from2016to2020, and the third starts from2021.At the first stage, we can choose the sectors that of high energy consumptions and high carbon dioxide emissions as the trading agents, such as electric power and heat production and supply, raw chemical material and chemical products, nonmetal material products, smelting and processing of ferrous metals, whose energy consumption has got to8000tons of standard coal. And at this stage, we could only choose carbon dioxide as trading objects. When the trading mechanism does work officially and efficiently, we can extend to the other industrial department and another five greenhouse gas to the mechanism.3. Hubei province will build a carbon emissions trading mechanism that works based on cap and trading. We can calculate the carbon dioxide emissions per unit of GDP according to carbon dioxide emissions and GDP of Hubei province, and then we predict the future carbon dioxide emissions to establish the carbon dioxide emission reduction targets, after that we can get the total carbon dioxide emissions of Hubei province’s reduction targets; and also we can get the total reduction targets by establishing the share of every trading agent’s reduction task according to the share of the total carbon dioxide emissions as well.4. Hubei province will consider the free allocation based on grandfather principles to establish the initial allocation of carbon trading quotas at the first stage. We can allocate the carbon quotas based on the baseline principles when the trading mechanism works efficiently, and we can consider to allocate the quotas by auction, and the shares of auction can gradually increase to100percent.5. We can consider Hubei Environmental Resource Exchange as the trading platform of the carbon emissions trading. The trading prices are determined by market, but at the first stage, the government can give appropriate intervention to ensure the market working stability. Storage and borrowing of carbon dioxide emissions are both not allowed at the first stage. The new attending trading agents will buy their carbon emission quotas from market.6. In order to ensure that the carbon emission trading mechanism can work efficiently, Hubei province should build a detailed regulatory system. The government ensures it by formulating and perfecting measures, laws and regulations. Beyond of this, the government should develop and manage a carbon emissions trading registration system to record the detail information of trading agents, such as the trading details and the quotas changes. Hubei province has build the Hubei Environmental Resource Exchange that can be used as the market of carbon emissions trading, based on this Hubei province can build its carbon emissions trading and accounting platform. In addition, the data of carbon emissions from the trading agents must be audited by the third independent agency.