Latest comments posted about The limits of free-market logic on ChinaDialogue en-gb http://www.chinadialogue.net/article/show/single/en/1332-The-limits-of-free-market-logic http://staging.chinadialogue.net/images/cdlogo.gif http://www.chinadialogue.net/article/show/single/en/1332-The-limits-of-free-market-logic Carbon finance is the result of economic measures enshrined in international law, designed to encourage the effective reduction of carbon emissions. It forms part of a cutting edge development model within the realm of environmental finance. The kind of carbon trading that has emerged both within and beyond the international legal framework following the establishing and development of carbon markets and carbon credit needs the support and guarantees provided by carbon finance. For it's part, carbon finance needs to be granted an equal and more efficient status within international law. Because of this, the concept of carbon finance itself needs further clarification, while both its current status and the issues it may encounter in the future demand closer analysis and evaluation. In this way, we will be better able to promote the scientific development of carbon finance within the stipulations of international law. Tue, 21 Apr 2009 10:35:45 +0000 http://www.chinadialogue.net/article/summary/1332#comment-8756 http://www.chinadialogue.net/article/summary/1332#comment-8756 The 'Kyoto Protocol' which officially came into effect on 16 February 2005 has established a global market for trading carbon emissions. This international treaty aimed at addressing global climate change has become a guarantee under international law which promotes using markets to control greenhouse gas emissions. The Protocol's "Clean Development Mechanism" (CDM) has compelled China to pass the trading of " Certified Emissions Reductions" (CERs) before 2012; urged industrialised countries to invest in emission reduction programs in China, to help fulfil China's part of the obligation to reduce emissions and then to ensure that companies in the relevant programs receive a considerable amount of financing opportunities. However, the system for the post-Kyoto generation is full of variables and future statutes under international law will not be able to ensure that China will always be in the non-Annex 1 country camp nor that China will definitely not participate in the reducing emissions privilege. In addition, because EU companies are the largest buyers of carbon credits, in future climate change agreements, the EU council will have the final say on how the market operates. Developed countries, led by the EU, already rigidly control established primary and secondary markets; everywhere within the relevant international regulations, it is clear that a strategic chess game is being played in the interests of the powerful countries. At the same time, starting from when the 2007 financial crisis hit the global financial services, carbon trading being no exception, and prices in the EUA and CER secondary markets fell to an all-time low, prices in the CER primary market continued to face pressure. Together with problems such as, the limitations of carbon credits themselves, sluggish demand in the CER, the risk of existing agreements being broken off and economic slowdown, caused China, a so-called "advanced developing country" to face policy adjustments and possibly risky mechanisms. Because of this, the development of China's carbon finance must be placed against macroscopic background of the development of international law, in accordance with the regulations of international environmental law and international financial law, integrating it fully with the reality of China's development. The international political power of major developing countries must be exploited to the full when participating in the games surrounding regulation, as regulation advances the development of existing carbon finance markets, maps out the possible variables facing the post-Kyoto generation and will provide a scientific basis for decision making regarding China's participation in international carbon finance. Written by Li Wei, PhD research student in International Law at East China University for Political Science and Law, email: iswish@126.com (Translated by Jodie Gardiner) Tue, 07 Apr 2009 07:54:09 +0000 http://www.chinadialogue.net/article/summary/1332#comment-8656 http://www.chinadialogue.net/article/summary/1332#comment-8656 Like Comment Number 2 said, it is more profitable to operate Methane and HFC programs. HFCs was once very popular. However according to the statistics of CDM programs released by the Office of National Coordination Committee on Climate Change of National Development and Reform Commission (NDRC), the last HFCs registered with NDRC ranks 72 among all the total of 1550. i.e. all HFCs had been developed three years ago. Projects on methane recovery and use, however, are heard from time to time. Most of the current CDM programs are small hydro power, wind power, biomass energy and other efficiency-improving programs, whose Baseline Scenaior is mainly to supply power to the power grids with the corresponding Green House Gas (GHG) of CO2 from coal combustion. In summary, the market mechanism ensures the survival of the whole profession of CDM. As long as it is profitable, people will do it no matter how big or small the emissions reduction will be. As long as there is emissions reduction, there will be environmental benefits. Of course, because of the inherent tendency towards self-destruction of market,it is necessary to introduce supervision and guiding mechanism. But so far, there have not been any major problems. ---Adam Cheung Translated by Yan LIU Mon, 06 Oct 2008 05:08:40 +0000 http://www.chinadialogue.net/article/summary/1332#comment-7913 http://www.chinadialogue.net/article/summary/1332#comment-7913 We've heard of CDM for a while in China. There are some successful examples in Zhejiang Province. I wonder which companies are currently employing CDM in China. Companies in Zhejiang are developing very fast. They are somehow related to this issue. I'm working as an information consultant in Zhejiang University. If any relevant company would like me to help, feel free to contact me. Gu Fang Shan Ren: zjuhgf@hotmail.com Thu, 27 Sep 2007 10:20:04 +0000 http://www.chinadialogue.net/article/summary/1332#comment-4457 http://www.chinadialogue.net/article/summary/1332#comment-4457 1. Projects that aim to cut emissions by reducing chemical gas emissions, like N2O, HFC-23, are the main targets of the intiative. On the contrary, it is a typical example to show how CDM works. Because there are no national regulations or laws on greenhouse gas reductions, to place a tax on carbon emissions is the only incentive for its reduction. 2. In the long term, CDM projects will mainly involve in renewable energy and energy efficiency areas. Chemical gas projects are almost done already. 3. CDM is a good example of how capital works out. So far CDM is the only effective way against global warming. Tue, 25 Sep 2007 02:37:56 +0000 http://www.chinadialogue.net/article/summary/1332#comment-4449 http://www.chinadialogue.net/article/summary/1332#comment-4449 The initial two motives of CDM are: 1. To lower the cost of emission reduction in developed country; 2. To encourage the exchange of technology to help the sustainable development in developing country. CDM includes improving energy efficiency and developing renewable energy program. But when comparing with Methane and other gas for industry, those programs need more complicated technology and make less profit. The reason is that the profit made from reducing 1 ton of Methane or other industrial gas is 20 times as much as carbon dioxide. So the market mechanism cannot stop the main investment of CDM flowing into this field instead of promoting the sustainable development in developing country. It is clear that environment and sustainable development problems cannot be solved only by the restriction of market mechanism. But recently lots of countries show interest in it, the main reason could be the huge profit. Fri, 21 Sep 2007 06:29:35 +0000 http://www.chinadialogue.net/article/summary/1332#comment-4437 http://www.chinadialogue.net/article/summary/1332#comment-4437 This piece has increased my knowledge of this subject. Hopefully, all people involved in this area will also come to read this article. Thu, 20 Sep 2007 15:11:15 +0000 http://www.chinadialogue.net/article/summary/1332#comment-4430 http://www.chinadialogue.net/article/summary/1332#comment-4430