Consolidate the foundation of the rule of law for the construction of the carbon market

For some time, the introduction of policies related to the carbon emission trading market (hereinafter referred to as the "carbon market") has been accelerated. Not long ago, the State Council officially promulgated the Interim Regulations on the Administration of Carbon Emission Trading (hereinafter referred to as the "Regulations"), which will come into force on May 1 this year. Recently, the Ministry of Ecology and Environment (MEE) has solicited public comments on the accounting and reporting guidelines for greenhouse gas emissions and verification techniques for enterprises in the aluminum smelting industry. The implementation of a series of policy actions indicates that the development of the carbon market is accelerating. In particular, as the first special regulation in the field of climate change in China, the "Regulations" will solve the problems faced by the carbon market in terms of insufficient laws and regulations, punishment and other problems, and provide a stronger guarantee for promoting the healthy development of the carbon market on the track of the rule of law.

Since 2013, China has launched a pilot project of carbon emission trading. On July 16, 2021, the national carbon market was officially launched. As of the end of February 2024, the cumulative trading volume of the national carbon market was 447 million tons, the cumulative trading volume was 25.32 billion yuan, and the average trading price was 56.6 yuan/ton of carbon dioxide. The role of the carbon market in optimizing the allocation of factors has initially emerged, which has played a positive role in guiding the society to establish the awareness that "carbon emission has costs and carbon reduction has benefits", and has become an important window to promote China's green, low-carbon and high-quality development.

As a new thing, the carbon market will inevitably encounter problems in the process of development and growth. For example, in recent years, the number and types of carbon-related disputes in China have been increasing. According to statistics, from 2016 to 2022, people's courts at all levels concluded nearly 1.12 million carbon-related cases in the first instance, including more than 600 carbon-related market transactions. The falsification of carbon emission reports released by the Ministry of Ecology and Environment (MEE) has also attracted some attention.

The lack of laws and regulations and the lack of punishment methods are an important reason for the above problems. Previously, due to the lack of specific laws and regulations on the carbon market, the operation and management of the national carbon market was still based on the rules and documents of the relevant departments of the State Council, and the legislative level was low, which was difficult to meet the actual needs.

The rule of law is the basic force to ensure the steady and long-term development of the carbon market. The promulgation of the Regulations has further rationalized the carbon market management system, established the regulatory responsibilities of the competent authorities, strengthened the main responsibilities of key emitting entities, clarified the legal status of registration institutions and trading institutions, and put forward strict management requirements for technical service institutions. In response to different violations of the law in the carbon market, the Regulations have significantly increased the penalties. For example, the Measures for the Administration of Carbon Emission Trading (Trial) issued by the Ministry of Ecology and Environment (MEE) stipulate a fine of between 10,000 and 30,000 yuan for the false reporting and concealment of greenhouse gas emission reports by key emitting enterprises. The "Regulations" not only set different fines for their illegal gains, but also imposed fines of between 50,000 yuan and 200,000 yuan on the directly responsible personnel. The Regulations also clarify the implementation subjects and basic rules for the allocation of carbon emission allowances, the preparation and verification of emission reports, the settlement of carbon emission allowances and market transactions. Strengthening the rule of law will effectively consolidate the operational foundation of the carbon market.

Although the construction of the carbon market has achieved positive results, on the whole, China's carbon market is still in the initial stage of development. While building a basic institutional framework to guide it to stay on the right track of development, it is also necessary to further strengthen the top-level design and gradually improve the market function, so as to provide better support for actively and steadily achieving carbon peak and carbon neutrality and promoting the comprehensive green transformation of the economy and society.

Specifically, it is necessary to strengthen the connection between the carbon market and the "dual carbon" policy system, and continue to improve the policy efficiency of the carbon market. Coordinate development, emission reduction and security, and continuously improve the design of carbon market mechanisms and supporting systems. Strengthen the connection between the carbon market and the energy and electricity market reform, and improve the carbon emission price formation mechanism and transmission mechanism。 Improve the market-oriented allocation system of resources and environmental factors, and integrate resource and environmental elements such as carbon emission rights, energy use rights, water rights, and pollutant discharge rights into the overall plan of market-oriented allocation reform of factors. The construction of the carbon market is a major institutional innovation, and only by doing a good job of overall coordination and cohesion can we better play the positive role of the carbon market in coordinating pollution reduction and carbon reduction and reducing the cost of emission reduction for the whole society.