Legal Regulations and Economic Impacts in Carbon Emission Trading Systems

As climate change intensifies, carbon emission trading has emerged as a crucial market-based tool for emission reduction. This theoretical study focuses on the legal framework of carbon trading and its economic effects, aiming to deepen the understanding of this emerging field’s complexity. The research systematically reviews the evolution of regulations in major global carbon markets, comparing and analyzing the design features of carbon trading mechanisms under different legal systems. The article delves into core issues such as the legal definition of carbon emission rights, allowance allocation methods, and market regulatory mechanisms, revealing how the legal framework shapes the operational mechanisms of carbon markets. Through theoretical modeling, the study extrapolates the potential impacts of carbon trading regulations on micro-enterprise behavior, meso-industrial structure, and the macro economy. The analysis indicates that while a robust legal system is fundamental to the effective operation of carbon markets, excessive regulation may suppress economic vitality and affect market efficiency. The research also explores the synergistic effects between carbon trading and other environmental policy tools, as well as the legal challenges faced by cross-border carbon trading. This paper provides a theoretical basis for optimizing carbon trading regulations, proposing recommendations for improving the legal framework, refining market mechanisms, and strengthening international coordination, aiming to promote the symbiosis and mutual benefits of environmental protection and economic development. This study offers important theoretical insights for understanding and improving carbon emission trading systems.