A study of contract legal issues in Chinese carbon market

Clean Development Mechanism (CDM) has given birth to an international carbon trading market prosperity, which provides developing countries with valuable opportunities to address climate change issues together with economic development and environmental improvement to achieve the sustainable goal. China, as the biggest carbon market, has caught worldwide attention. However, most studies of CDM focus on economics and environmental science, few on its legal problems. Transaction activities are the essence of market mechanism. To protect the benefits of market participators and regulate the market orders, the Contract Law takes this important role along with development of market mechanism. Therefore, this paper only focuses on the carbon market in China, with the assessment of the risks in the CDM development first. The involved contracts will be identified and analyzed to point out the major contract legal issues in Chinese carbon market. In the meantime, this paper further discussses that measurements at both private level and governmental level should be taken to protect and realize the utility and equality of contract in the carbon market.