The Research On Carbon Finance Supervision In The Context Of Low-carbon Economy

The world has made efforts to address climate and environmental issues through financial means to reduce carbon dioxide and other greenhouse gases. Financial activities related to climate change is defined as carbon finance. From legal perspective,carbon finance is generally agreed starting from “Kyoto Protocol”,an innovation,featured with the top-down guidance. Therefore the research over the effect on development of financial regulation over carbon finance is becoming significantly important.This paper analyzes the necessity and effectiveness of the development of carbon finance, and demonstrates the impact of financial regulation on the development of carbon finance under the background of low carbon economy. Through overview of the development of China’s financial regulatory context,we found that there are still deficiencies to be overcome,despite China has continuously adopted financial innovations,from a unified regulatory system to the evolution of separate supervision. Via studying the development of international carbon finance and China’s low-carbon economy,it has been found that without a unified, independent carbon financial market regulator,to truly achieve effective financial supervision and stringent regulatory mechanism will encounter many challenges.First of all,innovation of financial supervision under the framework of carbon finance is necessary. Carbon financing as an innovative product,brings benefit to the society,and meanwhile,has negative external effect,the same as other financial innovation products. Therefore,it is essential to establish suitable supervision system. In terms of common attribute of carbon finance and from the perspective of supervision of innovative product,carbon finance supervision should be a part of financial supervision and be purposeful. The common attribute of carbon financial products and its innovation has internally promoted the innovation of financial supervision,which in turn,being actively involved in the whole process of carbon financial innovation. The innovation of financial supervision has been promoted to the height of the national strategic level,and a part of global carbon financial innovation and development process. The information asymmetry in the development of carbon finance requires the establishment of the innovation system of financial supervision. The advancement of technical information will affect the outcome of the supervision. Hence,the paper suggests that carbon finance regulation should be involved in the process of formulating of international rules,as soon as possible. Through participating in the world innovation process of carbon finance,it may provide better opportunities in terms of China’s economic and financial development.Secondly,the financial supervision innovation under the framework of carbon finance is effective. From the perspective of regulatory control over carbon financing,China’s legal system of the financial supervision is less developed. Financial laws and regulations have loopholes and not be able to restrain the financial institutions well and give full play to their initiative. Meanwhile,they are not closely associated with the international financial development and the governance framework of international environmental pollution. This paper proposes to break the boundaries between banks and non bank financial institutions and establish a legal system,being in line with international standards. This paper addressed that the property right of state-owned capital is not clear,which is fundamental to the existence of rent-seeking and trapping. The two tracking system,without clear boundaries is the direct source of the rent and the information asymmetry is important reason of rent-seeking. The existence of rent seeking and trapping is proved in carbon financial supervision,and the paper puts forward that the carbon financial supervision has become the choice of the society.The development of carbon finance is different from the general financial development. It is innovative,to reduce carbon dioxide emissions via financial means,and solve the environmental problems caused by global warming,by top-down guidance. The innovation of financial supervision is necessary for the development of carbon financing. Based on theoretical and empirical analysis,the innovation of financial supervision under the framework of carbon finance is essential to the development of carbon financing, reducing energy consumption while maintaining economic growth and carbon dioxide emissions and solve the environmental problems. First, as the impact factor,financial supervision is effective in reducing consumption of carbon dioxide while maintaining GDP growth. Under the background of low carbon economy,it is necessary to involve the finical supervision in the process of development of carbon financing,given it will help to avoid detours of the innovation. Secondly,from the perspective of establishing suitable regulatory mechanism,this paper proposes that:I. Financial institutions should actively participate in the whole process of the development of carbon financing. II. Actively participate in formulating the rules of the development of international carbon financing,assuming responsibility of the great power and obtaining the discourse right under new world political and economic order. III Actively promote regional cross-border cooperation,as to provide financial security to the economic development.To summarize,the paper reviews the necessity and effectiveness of carbon finance supervision, and proposes innovations and policies on the regulatory framework for the development of carbon financing.