Low carbon economy represents the general trend, and cap and trade systemem is going to be a future international trade form which has a huge potential. For a long time, cap and trade system has been thriving in developed countries, especially in EU. In the current system, the whole process is mostly decided by the buyers, and the sellers can only follow the rule. However, most buyers are developed countries while sellers are developing countries. Developing countries started questioning the equity in this kind of single ruled system in which carbon might be resold in developing countries because of low prices.

Recently, Beijing Environmental Exchange in China has carried out a Panda Standard which monitors its emission cuts and more over, regulates provisions and creates a perfect market mechanism. China has the potential to be a big player in the future internaitonal carbon market, but other standards may not be suitable for China, and that was why China has developed its own system. China should develop its own standard so that it would not be restricted to participate using its full potential. The instauration of the Panda Standard satisfies the requests from Chinese industries and individuals. Even though the Panda Standard is only a voluntary reduction standard, it shows China’s incentives to tackle the problem and it sets China’s position in the international market. China has the most carbon resource and is the largest carbon emitter that it has to involve in the international carbon talks, but there are still problems existing even with the Panda Standard being carried out. In China, the actual carbon market is still not mature that it does not have a full and perfect system. Whether the standard will become effective highly depends on the policies and the development of the market.

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