The Research On The Principle Of China’s Carbon Emission Trading System

Climate changing has become one of the concerning issues around the world.Theincreasing amount of carbon emission gives a negative impact on the environment andthe development of the society.Therefore,most of countries in the world are makingefforts to develop low-carbon economy.Aiming at decreasing the energy consumptionand ecological pollution,they try to make innovations on mechanism andtechnology,and pursue a sustainable development to safeguard their interests ininternational community.As for developing countries,they have limited resources andenvironmental capacity,so they could not follow the traditional industrial path ofdeveloped countries.But it is not reasonable to drop the industrialization.If they couldfind a way to reduce carbon emission when developing economies,and make atransform to pay attention to both the economy and the environment whendeveloping,they could surely boost competitiveness in international community.With the second largest economy and the largest population in the world,Chinahas a large demand of carbon emission and find it hard to achieve energy-saving andejection-decreasing.If China want to get a win-win on the economy andenvironment,Chinese government must explore a unique carbon trading system basingon its own situation.This essay is trying to give a theoretical support for making a scientific strategyon low carbon,through analyzing different carbon trading systems,comparing theexperiences of developed countries and the application of economic theories.China isaccelerating the construction of carbon trading system with the references ofEU,America and Japan,basing on its own situation.However,there are some puzzlesthat need to be solved like the vague carbon reduction target and the lack of the initial allocation of carbon emission.Having considered those above,this essay analyzed the allocation of carbonemission and the principle of emission reduction.In terms of the allocation of carbonemission in China,it first reviewed the experience of developed countries(i.e.,free inEurope and auction in America),then analyze the pros and cons of free allocation andauction in three perspectives,drawing the conclusion that China should broaden thescope of the emission auction gradually.Regarding to the selection of the principle ofcarbon emission reduction,we created a panel data model which included the statisticsof14EU countries.And we proved that carbon trading turnover and the gross domesticproduction presents a significant negative correlation.As a result,China should insistcarbon emission intensity principle and promote industrial development by a new wayof industrialization.