He Study Of The Banking/Borrowing System Of Carbon Emission

Developing low-carbon economy has become a common appeal of global economic growth. Joint Implementation(JI), Emission Trade System(ETS) and Clean Development Mechanism(CDM) were established based on the policies of United Nations Framework Convention on Climate Chang and the Kyoto Protocol. Though China was not included in the countries attached in Appendix I, as the country, which has the largest carbon emission all over the world, there has been much more pressure from developed countries aiming to reduce the carbon emissions. Currently, China’s carbon emissions trading system is still under construction. Seven pilot cities including Beijing and Shanghai have been activated. In addition, the national carbon emission trading system with unified mechanism will be officially established in 2017.The official initiation of EU-ETS was activated in 20005. There have been three stages up until now and it is the world’s biggest carbon emission trading system. It can be an inspiring precedent and reference for China to establish its own ETS. However, series of problems have emerged since the operation of EU-ETS. The price fluctuation of the carbon emission has become one of the most severe ones, which need to be resolved as soon as possible. In order to resolve this problem, EU has conducted series of suggestions of reformation, and Banking and advanced borrowing mechanism has become one of the most essential parts of the reformation.Dating back to the end of 1970 s, emission-trading system of sulfur dioxide was launched aiming to resolve the problem of excessive discharge of sulfur dioxide. In addition, it reached remarkable achievements. Banking and advanced borrowing mechanism is a major principal which is being utilized by the carbon emission system of sulfur dioxide in the United States and it has a relatively sophisticated measures of auditing and supervising.This article has a reasonable examination of the advantages and disadvantages of banking and advanced borrowing mechanism during the process of execution. It also indicates my point of view and personal expectations towards the establishment of banking and advanced borrowing mechanism in China. From the micro point of view, the enterprises can, for instance, maximize its efficiency of producing by organizing its cycle of emission reduction. They can also utilize the banking and borrowing mechanism to gain profitable arbitrages. On the other hand, it remains difficult to predict the estimate both the short-term and long –term factors that influence the cost of carbon emission. It is also difficult to predict the trend of the price change. From the macro point of view, the vital element is to stabilize the price of carbon emission and enhance the market efficiency. Secondly, it is convenient for the supervision and regulation of the actual each enterprise towards it actual situation of carbon emission reduction in order to make the distribution standards of carbon emission for next stage. The difficulties each enterprise is facing, from a macro point of view, is the supervision and regulatory. It is much more complicated with the implementation of the banking and advanced borrowing mechanism both referring from the ability of reimbursement and the calculation of the actual amount of carbon emission than without the mechanism.In order to make some suggestions for the supervision and the expectation for its implementation in China, this article make some regulatory suggestions for instance, to establish the ‘Carbon bank’, to launch the rating system of the credits for reimbursement of each enterprise, control the tradable percentage of savings and to regulate the durable years of the mechanism. According to the fundamental realities of China during the period of economic growth, corresponding strategic suggestions are conducted, including the sophistication of declaration and examination system, the taxation of the advanced borrowing of carbon emission, establish the trust-worthy structure of management and supervision and so on. I hope these suggestions can contribute to the comprehensive implementation of China’s own banking/advanced borrowing mechanism and the market of carbon emission.