Legal Analysis on Chinese Carbon Market and the Impact of EU CBAM

다국어 초록 (Multilingual Abstract)

With the advancement of science and technology and the continuous development of industrial society, the global greenhouse effect is becoming increasingly severe. The fundamental reason for the greenhouse effect and climate change as global environmental problems is that in the process of pursuing economic benefits, human beings have ignored the carrying capacity of the earth's environment for carbon dioxide, which makes it difficult to coordinate the balance between economic development and the environment and resources. Carbon emissions trading, as an important means of controlling carbon emissions under the market economy system, has gradually become an important tool for countries to cope with climate change. However, the implementation of CBAM may bring new challenges, such as setting up trade barriers on the grounds of climate change. China needs to take effective measures to actively respond.
In recent years, China has actively explored the construction of a carbon trading system and assumed the responsibility of being the world's largest developing country. Through the construction of carbon trading pilot projects, China has accumulated valuable local experience in carbon emissions trading. With the launch of the national carbon market, China's carbon emissions trading system faces a series of challenges, including how to regulate the operation order of the carbon market, improve the relevant laws and regulations of the carbon trading system, and solve problems arising in the law enforcement process. These are the key issues that China needs to solve in the process of improving its carbon trading system.
Therefore, China not only needs to strengthen research on the carbon emissions trading market, but also needs to formulate more scientific and precise policies to support the healthy and orderly development of the market. Through these efforts, China can make greater contributions to global climate governance and sustainable development, and provide strong support for the realization of global emission reduction targets.
The text has five parts:
Chapter 1 introduces the research background, significance and methods of carbon emissions. As the global climate problem becomes increasingly severe, it has a profound impact on human production and life. In response to climate change, the international community has gradually taken action and actively explored solutions. A series of international treaties, including the United Nations Framework Convention on Climate Change and the Kyoto Protocol, have been signed one after another. Among them, the Kyoto Protocol is an important achievement after the entry into force of the Convention. It sets specific emission reduction targets and timetables for developed countries. The implementation of the EU CBAM will have an important impact on carbon emissions in developing countries such as China. Carbon trading, as an effective emission reduction tool, can not only promote economic development, but also help environmental protection and optimal allocation of resources. By reviewing the relevant literature of Chinese and international scholars, this paper analyzes the current hot spots in carbon emission research.
Chapter 2 introduces the theoretical background of the emission trading system. The theory of emission trading is rooted in economics. This chapter elaborates on three related economic theories: property rights theory, externality theory and public goods theory. In addition, there are three important theories in the field of law that support emissions trading: sustainable development theory, coordinated development theory and environmental justice theory. The US acid rain program is the first successful use of emissions trading mechanism to solve air pollution problems in human history, which has important historical significance. After seven international negotiations, the joint implementation mechanism, emissions trading mechanism and clean development mechanism were finally formed. Chinese President Xi Jinping first proposed the concept of ecological civilization in the report of the 18th National Congress of the Communist Party of China, advocating the construction of an ecological civilization system to better protect the ecological environment. In recent years, the Chinese government has actively responded to the challenges of climate change and strengthened international climate cooperation. China has launched a carbon trading pilot and established a national carbon trading market. China has carried out relevant pilot projects in the field of blue carbon trading to promote the application and development of carbon sinks in marine ecosystems.
Chapter 3 will systematically review the laws and policies in the field of carbon trading in China, and analyze them from aspects such as supervision, monitoring reporting and verification, emission caps, and quota allocation. At the same time, the relevant situation of China's seven carbon emissions trading pilots and the national carbon trading market will be discussed, and the industry scope and company types involved, carbon price fluctuations, transaction volume and other issues will be analyzed. Finally, it analyzes that China's carbon market faces problems such as unreasonable quota allocation, regulatory loopholes, and imperfect legal system that need to be solved.
Chapter 4 briefly introduces the concept of EU CBAM, the environmental background of CBAM, the policy and economic background, the purpose and development history of CBAM, and its operational characteristics. It analyzes the impact of CBAM implementation on China, especially the economic impact, as well as the potential impact on China's export industry, carbon prices, carbon emissions, industrial structure and carbon emissions data security. At the same time, it compares the Chinese carbon trading system with CBAM in terms of purpose, scope, market mechanism, international trade impact and competition. It is believed that the implementation of both is conducive to reducing emissions and addressing climate change issues. Finally, the legal disputes caused by the implementation of CBAM are discussed in detail. Its implementation may violate the non-discrimination principle stipulated by the World Trade Organization and may also constitute a trade barrier.
Chapter 5 proposes relevant suggestions for China's carbon trading system. The thesis proposes corresponding improvement suggestions from seven aspects: special law, regulations, punishment, access to the national carbon market, initial allocation and coordination of quotas within the region, national carbon emissions reporting and verification system, and carbon price control mechanism. At the same time, in order to cope with the challenges that the implementation of CBAM may bring to China, it proposes measures that China should actively respond to. Through these suggestions, I hope to promote the long-term and stable development of China's carbon emissions trading market, and then build an efficient and sustainable carbon emissions trading market system to achieve the strategic goal of addressing climate change.

목차 (Table of Contents)

• I. Introduction 1
• 1. Research background 1
• 2. Research significance 10
• 3. Research methods 12
• II. Theoretical background of ETS 19
• 1. Theory of ETS 19
• 1) Property rights theory 19
• 2) Externality theory 20
• 3) Public goods theory 22
• 4) Sustainable development theory 22
• 5) Coordinated development theory 25
• 6) Environmental justice theory 26
• 2. Historical development of ETS 29
• 1) US acid rain program 29
• 2) Adoption of Kyoto Protocol 30
• 3) Adoption of PA 36
• 3. Theorical background of Chinese adoption of carbon ETS 38
• 1) Ecological civilization 38
• 2) Chinese government response to climate change 41
• 3) Adoption of ETS to respond climate change 46
• III. Assessment of China's carbon market 52
• 1. China's NDC 52
• 1) NDC goal 52
• (1) Overall goal 52
• (2) The 14th Five-Year Plan and 2035 long-term goals 52
• 2) NDC policy system 54
• (1) "1+N" policy system 54
• (2) Green and low-carbon policy 55
• 2. Legal framework 56
• 1) National 56
• 2) Local 62
• (1) Beijing 63
• (2) Shanghai 64
• (3) Guangdong 64
• (4) Shenzhen 66
• (5) Hubei 66
• (6) Tianjin 67
• (7) Chongqing 68
• 3. Analysis of law and policy 69
• 1) Regulation 69
• 2) MRV 71
• 3) Cap emission 73
• 4) Carbon quota allocation 74
• 5) Market access regulations 75
• 6) Penalties 76
• 4. Current operation analysis of the carbon market 77
• 1) Chinese participation in Kyoto's CDM 77
• (1) Lessons 80
• 2) Regional carbon trading pilot 80
• (1) Sectors covered and companies 80
• (2) Price volatility 83
• (3) Trading volume 86
• (4) Market liquidity 88
• 3) National ETS after 2021 89
• (1) Sectors covered and companies 89
• (2) Price volatility 90
• (3) Trading volume 91
• 4) Trading products and methods 92
• 5) CCER 93
• 6) GHG reduction effect 94
• 5. Challenges in China's carbon market 99
• 1) Insufficient legal basis 99
• 2) Regulatory loopholes 100
• 3) Low penalty standards 101
• 4) Different market entry standards 103
• 5) Inaccuracy in quota allocation 105
• 6) Inconsistent MRV rules 109
• 7) Deficient carbon pricing mechanism 112
• IV. Impact of CBAM on China's carbon market 114
• 1. EU CBAM 114
• 1) Key concepts of CBAM 114
• 2) Background of the adoption of CBAM 115
• (1) Environmental background 115
• (2) Policy background 115
• (3) Economic background 117
• 3) The purpose of CBAM 119
• 4) The legal development of CBAM 120
• 5) Major features of CBAM implementation 123
• (1) Scope of the regulation 123
• (2) Requirements for importers of goods into the EU 124
• (3) Requirements for installation operators outside the EU 125
• (4) Emission calculations 127
• 2. The impact of EU CBAM on the Chinese economy 129
• 1) Impact on exports 129
• 2) Impact on carbon prices 131
• 3) Impact on carbon emissions 133
• 4) Impact on industrial structure 134
• 5) Impact on carbon emission data security 135
• 3. The comparability of China's ETS and CBAM 138
• 1) Industry scope 139
• 2) Market mechanism 141
• 3) Carbon data export security 142
• 4) Challenges and prospects 143
• 4. Potential legal disputes over EU CBAM to WTO 144
• 1) The principle of non-discrimination 144
• 2) Technical barrier to trade 151
• V. Suggestions for policy and legal changes for future Chinese ETS 156
• 1. General suggestions 156
• 1) Special law on carbon emission trading 156
• 2) Public regulation 159
• 3) Dishonesty punishment mechanism 167
• 4) National carbon market access system 175
• 5) Regional coordination mechanism for initial quota allocation 181
• 6) National carbon emissions reporting and verification system 187
• 7) Carbon price control mechanism 193
• 2. Suggestions for better preparing EU CBAM 195
• 1) Low-carbon industrial structure 195
• 2) Dual carbon strategy 198
• 3) Carbon accounting system 199
• 4) Exemption or fee reduction 200
• 5) Participation in international carbon markets 201
• 6) Developing equitable global climate governance with other developing countries 203
• VI. Conclusion 205
• References 211
• 국문요약 225