On The Financial Supporting System Of China’s Low Carbon Economy Development

Research indicates that in the past nearly100years the average surface temperature of earth has risen by0.74degrees centigrade. The carbon dioxide and other gases, produced by human activities, are the primarily factors that lead to Earth’s surface temperature increase, and they have caused tremendous damage to the climate change of Earth. Due to the greenhouse effects, the sea levels have been increased by47cm in the few past decades.While, if people leave this situations to continue, the greenhouse effect of climate change will have significant negative influence on the ecological system and on the supply of food and fresh water, threatening the future survival and the development of human society. The economic development has transferred from the traditional extensive pattern which is characterized by the high energy emission, high material consumption and high contamination to the pattern of low carbon economy which has the special characteristics with low energy emission, low energy as well as low pollution. That transformation is the inevitable choice of economic development.However, the problem is how to develop the low carbon economy and reducing the emission of carbon dioxide and other gases in order to restrain the tendency of global warming. Recently, the low carbon Economy is the focus that have been researched and discussed by the governments, international organizations, experts and scholars and even the international financial institutions. The financial institutions such as international financial institutions and banks are involved in the fields of low carbon economy and generate the rise of carbon finance market which is closely connected with low carbon economy. This would inject the fresh blood into the development of the low carbon economy. The development of carbon finance, which has become the engine of low carbon economy, plays the significant role that cannot be substituted.The carbon finance refers to the financial systems and financial trading activities which would decrease the greenhouse gas emissions. This definition mainly contains two aspects. On one side, it is focused on the carbon emissions permit as well as the relevant trade and investments of derivatives. On the other side, it tends to the investment and financing and other relevant activities on financial intermediation that attach to the low carbon projects exploitation. The carbon finance primarily relates to two core dimension questions. The first one concentrates on solving the problems of the initial allocations of carbon emission permit and trade plans through financial behaviors so as to improve the allocation efficiency of environmental resource. The second one pays attention to the upgrading and transformation led by the green credit of the financial institutions; to support the economic structural adjustment through the capital elements allocation. However the carbon finance derivatives, the carbon emission permit, will become the focus of research that link the carbon finance and low carbon economy. Obviously, as a kind of special commodity, the carbon emission permits’foundation of trade is still price. The price fluctuation which would lead to the huge transaction risk is influenced by the uncertain factors such as the demand and supply of carbon emission permits and the games among government. While as the demand and supply of carbon emissions is affected by numerous factors, for instance, the effects of population scale, energy intensity and financial support etc..As a result, a natural thought has appeared. On the stages of the low carbon economic development, how the Chinese government plays the vital role on financial support in order to sustain the system of low carbon economic growth? Therefore, this essay will explore from the following aspects and also will conduct a more comprehensive analysis.Initially, it will explore the routines in terms of the low carbon economic growth in China and how to construct scientific and perfect financial support systems that correspond with the growth of low carbon Economy.Secondly, the carbon financial markets play the vital role on the stages of low carbon economic development. So, it concentrates on the idea that how the trade price of carbon emission pennits operates on the carbon financial market. In other words, it will clarify the fluctuation of trade price on carbon emission permits as well as the problems of operation risks. As a result, this will bring more advises to the policymakers and provide the clear direction to participate in the trade of carbon financial market and to prevent the trade risk.Finally, the trade price of carbon financial market is affected by the carbon emission and indirectly is affected by the supply of carbon emissions and other factors. Then, these factors are going to be theoretically and empirically verified. Especially as for the factors of financial services, which have the essential impact on the low carbon economic growth (carbon emission). How these factors play the supporting role on low carbon economy as well as how these factors affect the operation mechanism. To put it another way, how the mechanisms are driven by the carbon emissions through the financial support. Subsequently, how should the government develop and set the relevant polities so as to improve and support the low carbon economic growth.Verifying these questions are of critical theoretical value and realistic significance for China’s participating in the international carbon financial markets better; for how to construct the carbon financial market system which in line with China’s national conditions; or improving the ability of the pricing of carbon trade and preventing the market risks; for capturing the opportunity the commending height of carbon finance during the process of the participation of the low carbon economic development of Chinese government and the transformation and upgrading of national economy.This dissertation divides into seven chapters; the main contents are summarized as follows:The first chapter is the introduction. It mainly expounds the background and significance of the research papers, and the research methods, the current situation of domestic and foreign research, the research thinking, the logic framework, the key points, difficulties and the possible innovations.The second chapter concentrates on the realization routines in terms of the Chinese government low carbon economic development. It is derived from the economic connotation and substance of low carbon economy, and introduces the international low carbon economic growth. The research paper stands the point of Chinese economic growth and energy utilization to analyses the actual difficulties, which indicates the low carbon economy is considered as the inherent requirements during the period of economic development and transition. In addition, standing from the summary of the Chinese low carbon economic development and reviewing the low carbon economic growth from the developed countries, the author claimed that the national strategic framework and specific planning would have been established and formulated, which are based on the foundation of Chinese low carbon economic development. The national strategic framework and planning could support the innovation and application on low carbon technology, adjusting the industrial structure to build the low-carbon industrial system, restricting the market assess standards in the high carbon industry and lastly establishing the fiscal and tax policy systems in terms of the low carbon Economy.For supporting to construct the low carbon financial system, the third chapter starts with the concept and content of carbon finance to analyze the function mechanism of the low carbon economic development by carbon financial markets, the carbon financial services and carbon financial policies. Consequently, the trinity framework is to be built that are consistent with the low carbon economic growth and supporting the low carbon economic development in the financial system.The fourth chapter provides the theoretical analysis that supports the low carbon economic development. This chapter analyses and evaluates the basic theory in terms of the emission right trading, and establishing the different types of theoretical frameworks that under the analysis of optimal permit trading on the microcosmic mechanism analysis. The Chinese practices and applications are taken into account. It analyses and evaluates the basic theory on carbon emission right trading and demonstrating that the mechanisms of carbon emissions have the promotion of the low carbon economic growth. In addition, this part also applies the game theory to build the game questions about carbon emission and emission reductions between countries, and further analyses the effects of the market mechanism on demand and supply of carbon financial products. Finally, the influencing factors of carbon emissions right trading price has been theoretically discussed, and providing the theoretical evidences on the empirical study and establishing the academic base for the following research which support the low carbon economic development.The fifth chapter discusses the empirical study of the prices fluctuation on the carbon market and influencing factors. This part is focused investigating the prices fluctuation of the carbon emission right trading on the carbon market and its risks. Furthermore, on the basis of the above theoretical analysis, the Chinese empirical data could be chosen as an example, researching the impacts of mechanisms that achieve the financial support to the low carbon economic development.The sixth chapter pays attention to the case analysis. This research article chose the case from the banking industry. The trinity framework is the foundation which supports the low carbon economic growth. It analyses the operational mechanism, which the banking industry has supported the low carbon economic development.The seventh chapter briefly provides the policy suggestions. It concentrates on the trinity view which is derived from the carbon financial markets, services and policies. It indicates that the Chinese government should provide a uniform trading platform which can innovate the trading mechanism, seize the right for carbon trading pricing during the process of carbon trading, develop the carbon financial intermediations, perfect the carbon financial systems, strengthen the construction of law and market and promote the carbon financial development...