The carbon trading mechanism is a system that regulates the international carbon trading market. Carbon assets are not originally commodities and have no significant development value. However, the signing of the 1997 Kyoto Protocol changed all this. According to the provisions of the "Kyoto Protocol", the amount of six greenhouse gases, including carbon dioxide and methane, emitted by all developed countries by 2010 will be 5.2% lower than in 1990. However, due to the high energy efficiency of the developed countries, the optimization of the energy structure, and the large number of new energy technologies used, it is difficult for the country to further reduce emissions. In developing countries, energy efficiency is low, emission reduction space is large, and costs are low. This leads to different costs for the same emission reduction amount in different countries, resulting in a price difference. There is demand in developed countries and supply capacity in developing countries, resulting from the carbon trading market.
The most popular explanation of the clean energy mechanism is: others pay for it, you come to reduce emissions. In order to make it clear where it comes from, we must start with two important international conventions, the United Nations Framework Convention on Climate Change and the Kyoto Protocol.
In 1992, at the United Nations Conference on Environment and Development, more than 150 countries formulated the "United Nations Framework Convention on Climate Change", requiring developed countries to limit greenhouse gas emissions and provide financial and technical assistance to developing countries. In December 1997, the Kyoto Protocol adopted by the Conference of the Parties to the 3rd Framework Convention in Kyoto, Japan stipulated that from 2008 to 2012, major industrialized The average reduction is 5.2%, and developing countries do not need to undertake emission reduction obligations before 2012. At the same time, according to the Clean Development Mechanism (CDM) established by the "Kyoto Protocol", developed countries can implement emission reduction projects or purchase greenhouse gas emissions in developing countries if they cannot complete their emission reduction tasks and obtain "certified emission reductions" As its own emission reduction.
As stated in the "Kyoto Protocol", the EU's emissions will be reduced by 8% by 2012. If this target cannot be achieved, the EU can pay for emission reduction projects from developing countries. The emissions reductions of the purchased projects are regarded as EU emission reductions. As for why the trading market is referred to as the "carbon market" internationally, Zhang Jianli, an expert of Norwegian Classification Society engaged in third-party certification of carbon trading, explained that this is mainly because "the other five greenhouse gases are ultimately calculated based on carbon dioxide emissions ".
"Emissions can be bought and sold. It should be said that it is a major initiative to improve environmental quality worldwide." Zhang Jianli introduced that because for developed countries, the cost of reducing greenhouse gas emissions is more than 100 US dollars / ton of carbon, while in China, etc. Most developing countries carry out CDM activities, and the cost of reducing emissions can be reduced to US $ 20 per ton of carbon. This huge difference in emission reduction costs has prompted developed countries to actively enter developing countries in search of cooperative projects, and has opened up a green channel for carbon trading.
"This is also the reason why the industry calls the CDM, which both reduces emissions and makes money, a free lunch for companies in developing countries." Zhang Jianli said.
There are three steps to the transaction
So, how to trade CDM in the carbon market?
Cheng Guang, a salesman of Beijing China Carbon Technology Co., Ltd. introduced that according to the "Marrakesh Agreement" reached by the Seventh Conference of the Parties to the United Nations Framework Convention on Climate Change in 2001, a typical CDM project is from preparation to implementation until it is finally produced. Effective emission reductions need to go through the main steps of project identification, project design, approval by participating countries, project approval, project registration, project implementation, high monitoring and forecasting, verification and verification of emission reductions, and issuance of verified emission reduction quotas. According to the Executive Board (EB) of the United Nations Framework Convention on Climate Change, as a developing country, there are currently nearly 2,000 CDM projects approved by the National Development and Reform Commission, and 267 CDM projects have been successfully registered in EB.
As an intermediary company engaged in carbon market transactions, Cheng Guang said that in the process of serving enterprises, they feel that CDM projects can be successfully registered in EB, which is a key factor in the success of CDM transactions.
Cheng Guang introduced that, generally speaking, carbon market transactions include pre-development, carbon asset development and carbon asset project management. And each process stage includes many links. For example, in the early development stage, project analysis should be carried out, that is, to determine which projects of the enterprise meet the concept of CDM; further collection of information, the estimation of emission reduction and the determination of measurement methods; the sustainability of the enterprise, the future of the market Forecast trends and determine development costs and development risks.
In the carbon asset development stage, the project document design, seller and buyer government approval, carbon purchase agreement signing, third-party certification, United Nations registration and other procedures are required. Cheng Guang said: "Each CDM project has an independent document report, the Chinese part is submitted to the Chinese government for approval, and the English part is submitted to third-party certification and United Nations registration. Registration needs to be posted online for 50 days. The end means that the automatic registration is successful. "
It is reported that in the carbon asset project management stage, we must focus on three aspects of work. First, daily management is required, mainly including process monitoring and business operation information acquisition, the purpose is to ensure the stable return of the company's carbon assets, and to avoid taking precautions with the buyer in advance without generating emission reductions. Secondly, according to the actual emission reductions, according to the requirements of the enterprise, a project test report should be issued quarterly or annually. Third, third-party certification of emission reductions, registration with the United Nations, and final delivery of carbon assets.
In these processes, what fees do companies need to pay? Cheng Guang introduced that the general cost includes the third-party review of the project (18,000 euros), registration fee (0.2 US dollars / year to verify the emission reduction tons), monitoring and verification and certification costs (about 10,000 US dollars), UN CDM director Adaptive fees (2% of the total emission reductions), administrative fees (0.2 USD / ton of emission reductions), and environmental resource taxes (2% of the total reductions) levied by the Chinese government, etc.
As for the role of intermediary companies in this, Cheng Guang said that identifying CDM projects, finding and screening carbon buyers for project owners, assisting companies in negotiations with buyers, helping companies maximize their benefits in emissions reduction transactions, and Ultimately, the completion of the CDM project is their main task.
