Research On The Effectiveness Of China’s Carbon Cap-and-trade System

In recent years,China has been committed to promoting energy conservation and emission reduction and developing a green low-carbon economy.In 2011,China proposed the gradual establishment of a carbon market in the 12 th Five Year Plan;Since2013,the first pilot projects of carbon emissions trading have been launched,and China has begun to try to implement a differentiated carbon cap-and-trade system in preparation for the establishment of a national carbon market.Subsequently,the report of the 20 th National Congress of the Communist Party of China clearly pointed out that we should "actively and steadily promote carbon peak and carbon neutralization",and important national documents and reports in China’s 14 th five-year plan and the 2022 report on the work of the Chinese government have always emphasized promoting market-oriented trading of carbon emission rights.In this context,how to coordinate the relationship between carbon emission reduction and economic development through institutional arrangements is particularly important.At present,China’s carbon quota trading market is in the parallel stage of pilot carbon market and national carbon market.Since the implementation of the existing system,it has exposed problems such as low market participation,poor quota liquidity and centralized explosive performance.From the perspective of institutional economics,based on studying the effectiveness theory of carbon cap-and-trade system and analyzing the practice of carbon cap-and-trade system in China,this paper makes a qualitative and quantitative analysis of its effectiveness based on the different design of carbon cap-and-trade system in various regions,to provide theoretical and practical reference for improving the effectiveness of carbon cap-and-trade system in China.As the national carbon market was officially launched on July 16,2021,the operation time is relatively short;In addition,compared with other carbon cap-and-trade system pilot projects,Fujian and Sichuan carbon markets started late and had great institutional differences,so the focus of this paper is on the first batch of "two provinces and five cities" to implement the pilot carbon cap-and-trade system.The main contents of this paper are as follows:First,the carbon cap-and-trade system and its effectiveness are analyzed theoretically.Combing the relevant literature,analyzing the current academic research on carbon quota,carbon cap-and-trade system and its effectiveness,on this basis,using institutional change theory,transaction cost theory,externality theory,property rights theory and public goods theory,this paper makes a theoretical analysis on the effectiveness of carbon cap-and-trade system,and puts forward the evaluation criteria for the effectiveness of carbon cap-and-trade system in China,That is,to make a qualitative and quantitative analysis of the effectiveness of China’s carbon cap-andtrade system from the three dimensions of its operation,emission reduction and spillover,in order to provide reference for promoting the realization of the "double carbon" goal.Second,analyze the carbon cap-and-trade system in China.Firstly,this paper uses the theory of institutional change to analyze the motivation for the establishment of carbon cap-and-trade system in China,and divides its evolution process into institutional germination stage,institutional pilot stage and institutional national implementation stage.Secondly,it analyzes the elements of China’s carbon cap-andtrade system arrangement,mainly including total amount control,quota allocation,MRV mechanism,market trading,payment performance and market supervision,and the elements are interconnected and coordinated.The motivation,evolution,and arrangement elements of carbon cap-and-trade system in China show the continuity and rationality of the system from different angles,reflect the possibility of effective system,and lay a foundation for further measuring and evaluating the effectiveness of carbon cap-and-trade system.Third,analyze the effectiveness of the operation of carbon cap-and-trade system in China.It mainly includes the operation data analysis and operation efficiency calculation of carbon cap-and-trade system.The results show that the pilot carbon quota trading volume,trading price,trading activity and performance are better,among which the pilot systems in Guangdong,Hubei,Beijing,Shanghai,and Shenzhen perform well in different aspects,while the carbon cap-and-trade system in Tianjin and Chongqing has poor implementation effect and inefficient system operation.Since the official operation of the national carbon market on July 16,2021,the operation has shown the following characteristics: first,the overall operation of the market is stable,the transaction scale is gradually expanded,and the transaction price is rising steadily;Second,the activity of market transactions is low,and there is more room for improvement;Third,the trading volume of carbon quotas is mostly concentrated near the performance cycle,showing an obvious "tide" phenomenon;Fourth,the regional distribution of key emission units is quite different;Fifth,at present,the trading mode of the national carbon market is mainly bulk agreements.At present,it is in the parallel stage of regional carbon cap-and-trade system and national unified carbon cap-andtrade system.The operation of carbon cap-and-trade system is generally effective,but there is still some room for improvement.Fourth,analyze the effectiveness of carbon cap-and-trade system emission reduction in China.This is mainly assessed from the perspective of achieving the emission reduction target of the carbon cap-and-trade system.Through the study of double difference method,it is found that,first,the implementation of carbon cap-andtrade system can significantly reduce carbon dioxide emissions,per capita carbon dioxide emissions and carbon dioxide emission intensity,which reflects the effectiveness of this system in emission reduction,and the emission reduction effect is sustained and cumulative.Secondly,in the process of carbon cap-and-trade system’s impact on carbon dioxide emissions,the expansion of population size,the improvement of economic level and the increase of energy intensity will lead to the increase of carbon dioxide emissions,which to a certain extent shows that China’s low-carbon economic development has a long way to go.Thirdly,the impact of carbon cap-and-trade system on per capita carbon dioxide emissions in terms of economic level and energy intensity tends to converge,but population size will have a negative impact on it.Finally,population size and economic level are significantly negatively correlated with carbon dioxide emission intensity,while energy intensity is significantly positively correlated with it,and in contrast,energy intensity has a more far-reaching impact on it.In addition,there are regional heterogeneity differences in the effectiveness of China’s carbon capand-trade system in reducing emissions,mainly manifested in the more significant emission reduction effects of the carbon cap-and-trade system in the eastern and central regions.Fifth,analyze the effectiveness of carbon cap-and-trade system spillovers in China.It mainly studies whether the implementation of this system has a spatial impact on adjacent areas,and how the degree and level of impact are.The empirical results show that the carbon cap-and-trade system not only have a direct effect on local carbon dioxide emissions,per capita carbon dioxide emissions and carbon dioxide emission intensity,but also has a spatial spillover effect on carbon emissions in adjacent areas.The implementation of the pilot carbon cap-and-trade system has a significant role in promoting the emission reduction effect of the pilot area,and has a significant spillover effect on the surrounding adjacent areas,that is,the implementation of the carbon capand-trade system has a significant inhibitory effect on the surrounding carbon dioxide emissions,carbon dioxide emissions per capita and carbon dioxide emissions intensity in the spatial dimension.In addition,there are regional heterogeneity differences in the spillover effectiveness of China’s carbon cap-and-trade system,and the carbon emission spillover effect of the pilot carbon cap-and-trade system in the eastern region is more significant on its neighboring areas.Sixth,put forward countermeasures and suggestions to enhance the effectiveness of China’s carbon cap-and-trade system.Through the analysis of the effectiveness of China’s carbon cap-and-trade system from the perspective of system establishment,operation,emission reduction and spillover,it is found that the system is effective,but there is some room for improvement.Therefore,the paper puts forward countermeasures and suggestions to enhance the effectiveness of China’s carbon capand-trade system from four aspects: improving the system supply and demand mechanism,accelerating the construction of system law,innovating the system supervision mechanism and promoting the development of supporting systems,so as to further enhance the effectiveness of China’s carbon cap-and-trade system,improve the enthusiasm of enterprises for emission reduction,promote the development of lowcarbon economy,and make positive contributions to addressing climate change.