Enabling Carbon Market Regulation under the Coupling of Institutional Rationality and Economic Rationality

Abstract

Carbon emissions trading is an important market-based instrument to address climate change and achieve carbon neutrality, which is different from general commodity trading and requires effective government regulation and empowerment. This paper analyzes the differences between the primary and secondary markets of carbon emissions trading from the perspective of coupling institutional and economic rationality, and points out that in the current carbon emissions regulation, the regulatory intervention is still insufficient in terms of scientificity, compulsion and flexibility, and systematic empowerment is needed. We should start from three perspectives: promoting the implementation of the Regulation on Carbon Emission Trading, clarifying the regulatory boundary between the horizontal authorities and the vertical central and local agencies in the carbon market, and paying attention to the synergy of economic incentive-based carbon emission regulation tools, and gradually constructing a regulation model compatible with carbon tax and carbon emission trading.