Abstract:

The proposal of the national“Dual Carbon”strategic goals has accelerated the development and growth of China’s carbon trading market, leading to the continuous improvement of its institutional and regulatory system. However, driven primarily by strategic guidance and policy directives, the carbon trading market—essentially an artificially constructed fiat market—suffers from inherent deficiencies in its legal basis and rule-of-law foundation. This inadequacy directly compromises the authority, certainty, and practical efficacy of the market and its institutional norms. The adoption of the Ecological and Environmental Code of the People’s Republic of China by the National People’s Congress and the innovative legislative paradigm of its Book on“Green and Low-Carbon Development”have not only established an autonomous discourse system of ecological and environmental law featuring Chinese modernization and green and low-carbon development, but have also become a new milestone. This milestone pushes China’s carbon trading institutional system to

transition from strategic guidance and policy fiction to rule-of-law construction, injecting new momentum into the standardization and legalization of the carbon trading system. The carbon trading-related provisions in the Code lay a legislative foundation for the evolution of the carbon trading market and its institutions from three aspects:  establishing a legitimacy basis for the carbon market, clarifying the structural direction of the market, and providing a normative basis for the development of the secondary carbon market. Meanwhile, the Code

significantly empowers the normative continuation of the carbon trading system by elevating its legal hierarchy, unifying carbon emission-related provisions scattered across other laws and regulations, and enhancing the carbon-reduction efficacy of the entire institutional framework. Based on the relevant legislative provisions of the Code, the normative reconstruction of the carbon trading system should take rights and powers as the underlying thread and regulatory synergy as the pathway. It aims to build an orderly and holistic development pattern characterized by“differentiation-synergy,”fully leveraging the market efficacy of both the carbon emission rights trading market and the voluntary greenhouse gas emission reduction trading market, thereby driving the nation’s transition toward green and low-carbon development.

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