Study On The Performance Of China Emissions Trading Markets In Promoting Carbon Emission Reduction

With the rapid development of modern industrial civilization of human society,the use of traditional fossil energy has caused serious damage to the natural environment by producing a large amount of harmful gases. Though China is a developing country facing with the burden of economic’s high growth, China still firmly chose to take the road of harmonious ecological civilization and promise to stop the increase of CO2 emissions before 2030, which means that China will have to bear enormous international pressure to reduce emissions. In order to actively respond to the global climate change and to implement the "Twelfth Five Year" plan,the national development and reform commission approved Beijing, Shanghai,Tianjin and other 7 provinces to start building carbon emissions trading earlier in2012. At present, the "Carbon Emission Trading Management Regulations(Draft)" have been drafted and is expected to start the national carbon emissions trading market in 2017.According to this article’s analysis of the situation of Chinese carbon emissions trading market, there are some problems about Chinese carbon trading market,including: the laws, regulations and policies of the specific provision is not clear and detailed which makes weak popularization efforts; there is not enough information transparency; lacking of basic data makes quota allocation scales of the markets different from each other and the room for adjustment is limited; the carbon emission trading markets now is having low active degree and lack of liquidity; the market based pricing mechanism has not yet really built so that the price is distorted. These problems will restrict the carbon emissions trading markets to play its role topromote enterprises to reduce carbon emissions.This paper analyzed the effectiveness of carbon emissions trading market promoting the enterprises to make the carbon reduction decisions by theoretical reasoning ways and mathematical model. Since the carbon dioxide emissions is a scarce resource controlled and issued by government, and its value is found and confirmed in the transaction in circulation, it can be regarded as a kind of production cost. Carbon emission rights prices promote the enterprises to make decisions on carbon emission reduction by rising to increase the total production cost. Also, this paper constructed an enterprise game behavior decision model and reached the same but more specific conclusions, which are: with the gradual increase in the price of carbon emissions, the gap between the price of low-carbon products and the price of the ordinary products will gradually narrow, which means that the final price of carbon emissions will be forced all ordinary enterprises to join the initiative to reduce carbon emission; strengthen the national consciousness of environmental protection also play a certain role in promoting energy-saving emission reduction units for manufacturers; when the reduction rate of single unit products within a certain period is fixed constant, carbon emissions trading market price and the total carbon dioxide emissions are negatively correlated; when not considering ability limit such as technology and production adjustment, producer will product under the optimal unit reduction rate, and the total carbon dioxide emissions inverted U-shaped curve with the market price increase; all the prices of products in the market are rising with the carbon emission right trading price and ordinary products are more subjected to impact than low carbon products. Then, this paper uses the example analysis to prove the conclusions that the mathematical model analysis made, which provide a theoretical basis for the theory that the government can use carbon emissions trading market to promote emission reduction more effectively.At the end of this paper, according to the analysis above, there are somesuggestions to improve carbon emissions trading market to effectively promote the ability of enterprises to reduce emissions: the relevant policies and regulations should be perfect,and establishment of a sound system is necessary; to give the information more transparency, government departments have to work together;balance the regional difference, get the quotas reasonable allocated; foster the main participator of carbon financial market.