Design And Practice Of China’s Emission Trading Institution

As an effective environmental management tool for reducing pollutions, the emission trading institution has been widely applied all over the world. As an exotic, the emission trading has been introduced to China nearly thirty years. With the development of this institution, the regions that have begun the pilot emission trading have extended from China’s eastern coastal areas to its central and western regions. Simultaneously, the trading varieties have covered several main pollutants including COD, SO2, ammonia nitrogen, nitrogen oxides and greenhouse gases. However, the pilot emissions trading in different areas have also exposed some problems in common. Among these problems, that the secondary market of the emission trading has not yet been established has become one of the important bottlenecks to restrict the development of China’ s emission trading. With that, this paper will focus on the Relationship between the Government and the Market in the secondary market of China’ s emission trading.This paper investigates the current situation of the development of the secondary market of China’s emission trading. Through the field research and literature analysis, this paper argues that the lag of the development of the secondary market is ubiquitous across China’ s emission trading pilot. The emissions are basically from the government to the enterprises, and rarely from enterprises to enterprises. Then this paper discusses the main factors restricting the development of the secondary market of China’ s emission trading. By analyzing the present conditions of system design and operation of emission trading in Jiaxing City, this paper summarizes the two major factors restricting the development of the secondary market of China’s emission trading. They are the transaction mode chosen by the government and the excessive government intervention into the market. Finally, this paper puts forward the corresponding policy recommendations according to the two major factors restricting the development of the secondary market of China’s emission trading. On one hand, the government should straighten out the relationship between the market and itself so that the market could play the basic role in allocating the emission resources and recover the other participants’ subject status in the market. On the other hand, we should improve the governmental trading supervision and strengthen the technical capacity and facilities construction related to the emission trading in order to ensure that the market subjects will take part in the emission trading normatively and orderly.This paper totally contains six parts. The first chapter is the introduction. In this chapter, we started the study with its background, significance, methods and contents. Then we described the review on the prior literature. The second chapter mainly introduces the basic theory of the emission trading and the practice of China’s emission trading. The third chapter chose the pilot emission trading in Jiaxing city of Zhejiang Province as the research object. This chapter will introduce the attempts which have been taken to develop the secondary market of Jiaxing’s emission trading as well as the difficulties met in these efforts. The fourth chapter analyzes the deep-seated reasons for the difficulties met in developing the secondary market of Jiaxing’ s emission trading. The fifth chapter puts forward the policy recommendations to develop the secondary market of China’ s emission trading. The last part will conclude the paper and put forward the further research contents.