It has opened a new situation in the rule of law for China's carbon emission trading
On January 25, Premier Li Qiang signed Order No. 775 of the State Council, promulgating the Interim Regulations on the Administration of Carbon Emission Trading (hereinafter referred to as the "Regulations"), which will come into force on May 1, 2024.
This is the first time that China has clarified the carbon emission market trading system in the form of administrative regulations, as a legal basis to guide the operation and management of China's carbon market, and the promulgation of the "Regulations" is generally considered to be a milestone in the development of the carbon market. As Xu Huaqing, director of the National Center for Climate Change Strategy and International Cooperation, said: "It has opened up a new situation in the rule of law for carbon emission trading in China. ”
The policy effect is initially emerging
Carbon emission trading is an important policy tool to control and reduce greenhouse gas emissions such as carbon dioxide through market mechanisms, and to help actively and steadily promote carbon peak and carbon neutrality.
In recent years, the construction of China's carbon emission trading market has been steadily promoted. In October 2011, the pilot work of local carbon emission trading markets was launched in Beijing, Tianjin, Shanghai, Chongqing, Guangdong, Hubei, Shenzhen and other places, the construction of the national carbon emission trading market was launched in December 2017, and the national carbon emission trading market was officially launched in July 2021.
According to the heads of the Ministry of Justice and the Ministry of Ecology and Environment, since the launch of the trading, the national carbon emission trading market has been running smoothly as a whole, covering an average of about 5.1 billion tons of carbon dioxide emissions per year, accounting for more than 40% of the country's total emissions. By the end of 2023, a total of 2,257 power generation companies have been included in the national carbon emission trading market, with a cumulative turnover of about 440 million tons and a turnover of about 24.9 billion yuan.
At the same time, the shortcomings in the construction of the national carbon emission trading market system are becoming increasingly obvious. The person in charge of the Ministry of Justice and the Ministry of Ecology and Environment said that there were no laws and administrative regulations on the management of carbon emission trading in China before, and the operation and management of the national carbon emission trading market was implemented in accordance with the rules and documents of the relevant departments of the State Council.
This was also confirmed by Zhu Xiao, a professor at the Law School of the Chinese People's University. In December 2014, the National Development and Reform Commission (NDRC) promulgated the Interim Measures for the Administration of Carbon Emission Trading to regulate the construction of a national carbon emissions trading market, and in December 2020, the Ministry of Ecology and Environment (MEE) promulgated the Measures for the Administration of Carbon Emission Trading (Trial) to regulate national carbon emissions trading and related activities.
These pieces of legislation are of low rank and lack of authority, making it difficult to meet the practical needs of regulating trading activities, ensuring data quality, and punishing illegal acts, so it is urgent to formulate special administrative regulations to provide a clear legal basis for the operation and management of the national carbon emission trading market, and to ensure and promote its healthy development. In addition, the report of the 20th National Congress of the Communist Party of China clearly proposed to improve the carbon emission market trading system. Therefore, as the heads of the Ministry of Justice and the Ministry of Ecology and Environment said, the formulation of the "Regulations" is a specific measure to implement the spirit of the 20th National Congress of the Communist Party of China, and it is also an objective need for the construction and development of China's carbon emission trading market.
Prevent and punish data fraud
The authenticity of emission data is the basic premise for the normal operation of carbon emission trading and the performance of policy functions. "Comprehensive, accurate and authentic carbon emission data is not only the basis for the expansion and vitality of the national carbon emission trading market, but also the key factor affecting the effectiveness of greenhouse gas emission reduction in the current national carbon emission trading market. Xu Huaqing said.
According to the heads of the Ministry of Justice and the Ministry of Ecology and Environment, in terms of preventing and punishing carbon emission data fraud, the "Regulations" mainly make provisions from four aspects: First, strengthen the main responsibility of key emitting enterprises. Key emitting enterprises are required to formulate and strictly implement emission data quality control plans, truthfully and accurately calculate their greenhouse gas emissions, prepare annual emission reports, and be responsible for the authenticity, completeness and accuracy of the reports, and report to the public in accordance with regulationsopen letterand keep original records and manage ledgers.
The second is to strengthen the management of technical service institutions. For example, a technical service institution entrusted to carry out inspection and testing related to greenhouse gas emissions shall comply with the requirements of relevant national technical regulations and technical specifications, bear corresponding responsibilities for the inspection and testing reports issued, and shall not issue false reports.
The third is to strengthen supervision and inspection. It stipulates that the competent department of ecology and environment and other departments responsible for supervision and management may conduct on-site inspections of key emitting enterprises and technical service institutions, clarify the measures that can be taken for on-site inspections, and require the inspected persons to truthfully report the situation and provide information, and shall not refuse or obstruct them.
Fourth, increase the severity of punishment. For those who commit fraud in the inspection and testing related to greenhouse gas emissions, the preparation of annual emission reports and technical audits, strict penalties such as fines, orders to suspend production for rectification, cancellation of relevant qualifications, and prohibition from engaging in corresponding businesses, and the establishment of a credit record system. "Compared with the Administrative Measures for Carbon Emission Trading (Trial), the administrative penalties have been greatly increased, which will help strengthen the constraints on violations of laws and regulations and effectively ensure the quality of carbon emission data. Xu Huaqing said.
In Xu Huaqing's view, the "Regulations" strictly manage, investigate, and punish the violations of laws and regulations of relevant participants in the national carbon emission trading market, and form an effective deterrent, ensure that the national carbon emission trading market operates on the track of the rule of law, and provide strong legal support for the construction of a high-level carbon emission data quality management mechanism and a high-standard market system.
Define the core elements of the transaction
Clarifying the supervision and management system is an important aspect of strengthening the management of carbon emission trading, and it is also one of the important purposes of formulating the Regulations. The Regulations specify that the competent department of ecology and environment of the State Council shall be responsible for the supervision and management of carbon emission trading and related activities, and other relevant departments shall be responsible for the supervision and management of carbon emission trading and related activities in accordance with the division of duties.
The "Regulations" construct the basic institutional framework for the management of carbon emission trading from six aspects: first, the legal status and responsibilities of registration institutions and trading institutions, second, the coverage of carbon emission trading, trading products, trading subjects and trading methods, third, the determination of key emitting entities, fourth, the allocation of carbon emission allowances, fifth, the preparation and verification of emission reports, and sixth, the settlement of carbon emission allowances and market transactions.
Lai Xiaoming, chairman of the Shanghai Environment and Energy Exchange, observed that the "Regulations" clarify the core elements of trading, and gradually enhance the vitality of the market on the basis of adhering to the overall positioning of the carbon market as a policy tool to control and reduce greenhouse gas emissions.
For example, the Regulations define the spot attributes of carbon market trading products, clarify that the trading entities include key emitting enterprises and other entities, and establish a trading method based on agreement transfer and one-way bidding. "The spot trading method established by the Regulations is in line with the trading of relevant entities in the carbon market at this stagepracticeIt is also an important choice to adapt to the characteristics of the carbon spot market. Lai Xiaoming said.
"It is foreseeable that with the formal implementation of the Regulations, China's carbon market will usher in a huge opportunity for innovation and development, the trading rules will be more complete and clear, the trading subjects will be more extensive and diverse, the trading products will be more diverse, the trading methods will be more flexible and convenient, the risk control will be more comprehensive and effective, the information disclosure will be more open and transparent, and the market operation will be more dynamic. Lai Xiaoming said.
The "Regulations" establish the basic institutional framework for the management of carbon emission trading, but to truly implement it, it is inseparable from the supporting regulations, methods, standards and other more specific and operational provisions to support. The heads of the Ministry of Justice and the Ministry of Ecology and Environment said that it is necessary to introduce relevant supporting regulations in a timely manner and improve the regulatory infrastructure. The management of carbon emission trading is professional and technical, and the support of infrastructure is very important to effectively implement supervision. Among them, the national carbon emission trading market management platform plays an important role in the implementation of the whole process and all-round dynamic supervision and the improvement of supervision. Relevant parties will take the implementation of the "Regulations" as an opportunity to coordinate and integrate all aspects of forces, accelerate the construction of management platforms, improve the level of informatization and intelligence of supervision, and form a joint regulatory force.
