1. In the Formation and connotation of carbon trading
I witnessed the introduction of current carbon trading environment by the vice president of the Beijing representative office for the British Climate Change Capital Group, as he revealed the an undeniable fact that a worldwide carbon trading is taking shape.

The formation of carbon trading dates back to the industrialization following the second Industrial Revolution in developed countries. Industrialization posed greater impact on the environment, increasingly accelerating the concentration of greenhouse gases and finally resulting in greenhouse effects. To slow down the tendency, a train of conventions had been made by countries all over the world. Among them is The United Nations Framework Convention on Climate Change, or UNFCCC for short. Carbon trading was thus created through these conventions aiming at solving environmental problems. Noxious gas emissions in developing countries were minor and below standards due to their limited economic strength. By contrast, developed countries always went beyond their limits. Consequently, a portion of quota on carbon emission was purchased by the developed countries from the developing, giving rise to the trade of carbon.

What impressive us most was the three mechanisms mentioned in carbon trading and Kyoto Protocol. Going through the three mechanisms, we seemed to see none of the social responsibilities from each country on the reduction of greenhouse gas emission and the alleviation of greenhouse effect. The only thing we could find was benefits. For developed and developing countries, they could more or less benefit from it. What they still need, was the sense of social responsibility. So why can’t we just reduce the amount of emission “as many as possible”? Here was the importance of the sense of social responsibility.

2. The study of carbon trading mechanism
With the rapid development of world economy, industrial civilization has constantly progressed. Problems such as global warming are severely affecting the living environment of human beings.
The whole world was taking active cooperation to tackle the problem of greenhouse gas emission. A series of highly effective methods, such as The United Nations Framework Convention on Climate Change and Kyoto Protocol enacted by Intergovernmental Panel on Climate Change (IPCC), are used. In a manner of speaking, the formulation of these conventions demonstrated a crystallization of entire human races’ wisdom. Meanwhile they were successful measures taken in dealing with world problems.

The worldwide carbon trading, as well as those among developed countries and those among developed and developing counties all emerged within the three mechanisms of Kyoto Protocol—Clean Development Mechanism (CDM), Joint Implementation (JI), and Emission Trading (ET). For China, the major realm of carbon trading is CDM. The lecture gave a general idea of CDM’s operation process and talked about some specific cooperation projects. We could learn from these that carbon finance, which incorporates environmental protection concepts with financial instruments, was a great stimulus to the goal of reducing carbon dioxide and noxious gas emissions. At present, China has become the greatest supplier of CDM. Although CDM trading mechanism is partly helpful in improving the return of investment for emission reduction projects in China, the miscellaneous procedure, expensive transaction cost, and huge uncertainty calls for the whole international communities’ push for its reform and perfection.

The valid date of Kyoto Protocol lasts until 2012. Once it went expired, so would be the carbon trading. By then, part of carbon financing institutions would also shut down, and the mankind would step into a post-Kyoto Protocol Age to deal with greenhouse gas emission. Given that there were respective countries disposing of responsibilities and withdrawing from the contract unilaterally, other contracting parties are also trapped by a dilemma between the conflict of interest and responsibility. Along with a worldwide deepening understanding on climate change, as well as the acceleration of negotiation process, people were expecting a confirmation of the next cooperation intention. It was a significant policy strategy in regard to the whole world and human existence; every country should cooperate with a common effort and make reasonable concession.

In fact, dealing with climate change calls for action together, rather than relying on several leading powers, let along the dependence just on the financial derivative instruments of carbon trading. We need better start from the practice and our side to let the whole world join us. For instance, the government enacts a train of policies and guidelines and preferential measures encouraging low carbon; enterprises make sure to implement social responsibilities, combine its production with low carbon, and make its own contribution to the publicity and extension of low carbon concept; individuals should also actively response to various publicity, closely connect low carbon with our daily life, leading in a significant change on people’s concept, lifestyle, etc. As a university student in the new century, perhaps we could do nothing for the targeting and egoism of carbon trading; still we can start from ourselves, set up the consciousness of social responsibility and sustainable development, and gradually change the present tendency on environmental protection.