Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Finance, banking system

Mechanism Design and Institutional Arrangement of Carbon Financial System Operation under the Framework of Low-carbon Economy

Author LiYang
Tutor DuLi
School Jilin University
Course Finance
Keywords low carbon economy carbon finance mechanism design institutionalarrangement supporting policies
CLC F832.1
Type PhD thesis
Year 2013
Downloads 723
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The twenty-first century is a new era pursuing comprehensive sustainabledevelopment. At present, global warming has already received unprecedentedattention from people, and how to develop low-carbon economy has drawn wideattention from the whole society. The issuing of such protocols as the United NationsFramework Convention on Climate Change and Kyoto Protocol has shown that thewhole world has already started to take practical actions against the environmentalproblems. Currently, extensive economic growth pattern still holds a dominantposition in China, and the traditional energy still takes up more than80%of energyconsumption during the economic development process. Owning to the high energyconsumption, abundant emission, severe pollution and low efficiency,sustainable economic development in China is confronted by severe challenges.Therefore, it is quite urgent to look at China’s economic operation mode in anotherperspective and to explore a progressive framework applicable for the low-carboneconomy. Seen from the international perspective, long-term challenges fromclimate changes and short-term challenges from financial crisis are the mostsignificant problems confronted by human development. The former requires theworld economy to develop towards low-carbon mode, while the later requires thereform of imbalanced international financial system, and carbon financial systemshould be the optimal joint point of the above mentioned two great challenges. It isthe economy that determines the adjustment of industrial structure and economic structure, as well as the reform of economic development mode and consumptionmode in the finance and low-carbon economic development, which will certainlygive rise to structural revolution in the international finance industry. Meanwhile, itwill develop towards the carbon finance from the original traditional finance to adaptto the development of low-carbon economy.In this paper, theoretical and empirical analysis has been carried out for thefinancial system and mechanism in low-carbon economy from a brand newperspective, which combines history and reality, aiming at seeking for the rules oflow-carbon financial development, and discussing the interactive mechanism offinancial innovation and low-carbon economy.Part One: theoretical study on the support of carbon finance on thelow-carbon economic development.In this part, further studies will be conducted to fully take advantage of theuseful values based the combination of economic theories, including thelow-carbon economics theory, financial support theory, environment resourcevalue theory, institutional economics theory, public management theory, etc.which will lay a theoretical foundation for studying the mechanism design andinstitutional arrangement for low carbon finance in China.Part Two: experience and inspiration from domestic and foreign carbonfinancial development.In this part, developed countries like America, Japan and Europe Union, aswell as developing countries, whose carbon finance develops rapidly, like Indiaand China, are taken as the study object to learn about current development statusof carbon financial development in China clearly, and then advanced experience isconcluded for reference. Meanwhile, inspirations are achieved.Part Three: operating mechanism design of carbon finance.The operating mechanism of carbon finance mainly includes four aspects, namely banking industry, insurance industry, bond industry and financial market.As for the banking industry, practices of green credit and the development trend ofthe carbon credit products are further studied in this part, and the operatingmechanism of banking industry under the principle of carbon credit and loan isdesigned. As for the insurance industry, it is considered as a low-carbon industry,and the carbon insurance is a low-carbon product provided by insurance industry. Itsoperating mechanism mainly includes the internal mechanism, external mechanismand the development evaluation index system. As for the carbon bond, the existingmoral risk in the carbon bond development is analyzed on the basis of summarizingthe domestic and foreign carbon bond practice, and suggestions are proposed forthe supporting functions of carbon bond to carbon finance. As for the financialmarket operating mechanism, suggestions are provided for the design of financialmarket operating mechanism under the carbon financial framework from suchaspects as the market exchange mechanism, carbon financial products, carbonfinancial pricing and carbon currency.Part Four: institutional arrangement of carbon financial operation.In this part, the currency institutional arrangement and financial supervisionreform are specifically discussed. The financial policy choice supporting thelow-carbon development is studied through comparatively analyzing the domesticand foreign currency policies in promoting carbon financial development. Theinstitutional economic theory is applied for analyzing different financial supervisionsystem and exploring a mode applicable for China’s carbon financial supervision.Part Five: economic effect analysis of the implementation of carbonfinancial system.In this part,the economic structural adjustment effect and cooperative effect ofthe carbon financial system implementation are studied with empirical analysis.Meanwhile, the influence from the implementation of carbon financial system on the target selection of economic subject is further analyzed.Part Six: study on the supporting policies concerning the implementationof carbon finance.In this part, related financial policy and industrial policy supporting thefinancial development are studied with the normative analysis method, whichprovides scientific basis and data support for making supporting policy of carbonfinance.

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