Clean Development Mechanism and Construction of Carbon Trading Market in China

The clean development mechanism(CDM) is one of the three flexibility mechanisms defined in the Kyoto Protocol.The CDM has made an important contribution to the sustainable development in China;however,there are still many problems during the operation of CDM in China and this situation puts participation of China in the international carbon trading market and construction of domestic carbon trading market at risk.In light of this,this paper compares the types,amount,registration and issue of CDM projects in China,and then finds that the CDM projects are in large quantity,but the development of different types of projects is uneven.On this basis,we analyze the main problems of CDM in China,including the lack of legal system,insufficient potential of emission reduction and lack of scientific assessment of transferred technologies.Then,this paper represents the market risk arising from project investment reduction and cost increase and environmental risk arising from carbon leakage that China has to take through introducing the uncertainty of the development of global carbon trading market and developing trend of post-Kyoto period.In light of the problems and risks,this paper proposes to constructa domestic carbon trading market on the basis of the existing experiences of CDM in China;the basic thinking is that the construction of China carbon trading mechanism should be based upon an emission trading legal system,starting from a voluntary trading market model and guaranteed by a perfect management and supervision system.