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China’s national carbon emissions trading scheme: lessons from the pilot emission trading schemes, academic literature, and known policy details

Stoerk, Thomas, Dudek, Daniel J. and Yang, Jia (2019) China’s national carbon emissions trading scheme: lessons from the pilot emission trading schemes, academic literature, and known policy details. Climate Policy, 19 (4). pp. 472-486. ISSN 1469-3062

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Identification Number: 10.1080/14693062.2019.1568959

Abstract

Upon completion, China’s national emissions trading scheme (C-ETS) will be the largest carbon market in the world. Recent research has evaluated China’s seven pilot ETSs launched from 2013 on, and academic literature on design aspects of the C-ETS abounds. Yet little is known about the specific details of the upcoming C-ETS. This article combines currently understood details of China’s national carbon market with lessons learned in the pilot schemes as well as from the academic literature. Our review follows the taxonomy of Emissions Trading in Practice: A Handbook on Design and Implementation (Partnership for Market Readiness & International Carbon Action Partnership. (2016). Retrieved from www.worldbank.org): The 10 categories are: scope, cap, distribution of allowances, use of offsets, temporal flexibility, price predictability, compliance and oversight, stakeholder engagement and capacity building, linking, implementation and improvements. Key policy insights Accurate emissions data is paramount for both design and implementation, and its availability dictates the scope of the C-ETS. The stakeholder consultative process is critical for effective design, and China is able to build on its extensive experience through the pilot ETSs. Current policies and positions on intensity targets and Clean Development Mechanism (CDM) credits constrain the market design of the C-ETS. Most critical is the nature of the cap. The currently discussed rate-based cap with ex post adjustment is risky. Instead, an absolute, mass-based emissions cap coupled with the conditional use of permits would allow China to maintain flexibility in the carbon market while ensuring a limit on CO 2 emissions.

Item Type: Article
Additional Information: © 2019 Informa UK Limited, trading as Taylor & Francis Group
Divisions: Grantham Research Institute
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
Date Deposited: 06 Mar 2019 14:15
Last Modified: 20 Oct 2020 05:33
URI: http://eprints.lse.ac.uk/id/eprint/100220

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