Analysis of carbon emissions market-drived regulation policy

The Development of environmental regulation of carbon emissions policy experienced three stages include no regulatory policy, administrative command control regulation and market-drived regulation. Cap-trading system is the primary means in market-drived regulation. In cap-trading system, the carbon emissions rights price increases with the increase of carbon emissions abatement amount, which means that the increase of emission reduction targets will push carbon emissions trading prices higher in the market. The larger difference of marginal abatement costs between the two transaction sides, the motivation for transaction is higher.