Analysis of cost accounting and reduction path of carbon emissions under China's carbon trading mechanism

Abstract

China's National Carbon Emissions Trading Market officially launched online trading on July 16, 2021. Based on the externality theory and Coase's Theory of Property, this paper calculates the carbon emission costs of the eight key carbon emission industries under the mechanism of China's carbon trading market. The study shows that, under the current scenario of free allocation of initial quotas, the carbon emission cost of the eight major industries in China accounts for an average of 0.05% of the income. However, when the initial quotas are paid, and the allocation proportion is 100%, the carbon emission cost of each industry increases significantly, accounting for an average of 0.92% of the income. It is concluded that the carbon emission quota control and China's carbon trading market mechanism will increase the carbon emission cost to a certain extent, thus encouraging enterprises to update technology and replace energy to achieve energy conservation and emission reduction. Under the background of the national unified market and given China's “carbon peaking and carbon neutrality” goal, the article puts forward four measures, including expanding the scope of industry participation in carbon trading, changing the amount of free carbon quota, formulating a reasonable total amount of carbon quota, and promoting the integration of local carbon market into the national carbon market, aiming to promote the carbon emission trading market to help China reduce carbon emission.