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Lessons learned from Chinas regional carbon market pilots

Author

Listed:
  • Junjie Zhang
  • Zhenxuan Wang
  • Xinming Du

Abstract

This paper gives an overview of the performance of China's seven regional carbon market pilots and the range of approaches they have used. We assessed the outcomes of these pilots using publicly available secondary market trading data. The differences in market performance are explained by the design of key market elements such as emission allowances, covered sectors, allowance allocation, monitoring, reporting and verification, compliance and penalties, and offset market. The lessons learned from the regional carbon market pilots are used to provide insights that can aid in the design of the upcoming national carbon market.

Suggested Citation

  • Junjie Zhang & Zhenxuan Wang & Xinming Du, 2017. "Lessons learned from Chinas regional carbon market pilots," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    • Handle: RePEc:aen:eeepjl:eeep6-2-zhang
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    Cited by:

    1. Panle Jia Barwick & Shanjun Li & Liguo Lin & Eric Yongchen Zou, 2024. "From Fog to Smog: The Value of Pollution Information," American Economic Review, American Economic Association, vol. 114(5), pages 1338-1381, May.
    2. Goulder, Lawrence H. & Long, Xianling & Lu, Jieyi & Morgenstern, Richard D., 2022. "China's unconventional nationwide CO2 emissions trading system: Cost-effectiveness and distributional impacts," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    3. Chen, Zhongfei & Zhang, Xiao & Chen, Fanglin, 2021. "Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    4. Liu, Menghe & Li, Yuxiao, 2022. "Environmental regulation and green innovation: Evidence from China's carbon emissions trading policy," Finance Research Letters, Elsevier, vol. 48(C).
    5. Kayisoglu, Gizem & Gunes, Bunyamin & Besikci, Elif Bal, 2022. "SLIM based methodology for human error probability calculation of bunker spills in maritime operations," Reliability Engineering and System Safety, Elsevier, vol. 217(C).
    6. Jin, Yana & Liu, Xiaorui & Chen, Xiang & Dai, Hancheng, 2020. "Allowance allocation matters in China's carbon emissions trading system," Energy Economics, Elsevier, vol. 92(C).
    7. Yu, Yanni & Zhang, Xinyi & Liu, Yunxiao & Zhou, Tao, 2024. "Carbon emission trading, carbon efficiency, and the Porter hypothesis: Plant-level evidence from China," Energy, Elsevier, vol. 308(C).
    8. Maogang Tang & Silu Cheng & Wenqing Guo & Weibiao Ma & Fengxia Hu, 2023. "Relationship between carbon emission trading schemes and companies’ total factor productivity: evidence from listed companies in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11735-11767, October.
    9. Huang, Xuhui & Zhou, Tao & Zhang, Ning, 2025. "How does the carbon market influence the marginal abatement cost? Evidence from China's coal-fired power plants," Applied Energy, Elsevier, vol. 378(PA).
    10. Qi, Xiaoyuan & Han, Ying, 2023. "Research on the evolutionary strategy of carbon market under “dual carbon” goal: From the perspective of dynamic quota allocation," Energy, Elsevier, vol. 274(C).
    11. Andreas Löschel & Jiansuo Pei & Ran Wang & Bodo Sturm & Wolfgang Buchholz & Zhongxiu Zhao, 2021. "The Demand for Global and Local Environmental Protection: Experimental Evidence from Climate Change Mitigation in Beijing," Land Economics, University of Wisconsin Press, vol. 97(1), pages 137-154.
    12. Ambec, Stefan, 2022. "The European Union’s Carbon Border Adjustment Mechanism: Challenges and Perspectives," TSE Working Papers 22-1365, Toulouse School of Economics (TSE).
    13. Wang, M. & Zhou, P., 2022. "A two-step auction-refund allocation rule of CO2 emission permits," Energy Economics, Elsevier, vol. 113(C).
    14. Sturm, Bodo & Pei, Jiansuo & Wang, Ran & Löschel, Andreas & Zhao, Zhongxiu, 2019. "Conditional cooperation in case of a global public good – Experimental evidence from climate change mitigation in Beijing," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    15. Yuqi Zhang & Haisen Wang & Zhigang Chen & Xuechao Wang, 2025. "Digital finance and carbon emissions: empirical evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(1), pages 1-23, January.
    16. Xinwei Zhao & Xinsong Yang & Geng Peng & Shengjie Yue, 2023. "International Trade and Carbon Emissions: Evaluating the Role of Trade Rule Uncertainty," Sustainability, MDPI, vol. 15(15), pages 1-19, July.
    17. Lei Zhu & Xu Wang & Dayong Zhang, 2020. "Identifying Strategic Traders in China’s Pilot Carbon Emissions Trading Scheme," The Energy Journal, , vol. 41(2), pages 123-142, March.
    18. Zhixiong Weng & Cuiyun Cheng & Yang Xie & Hao Ma, 2022. "Reduction Effect of Carbon Emission Trading Policy in Decreasing PM 2.5 Concentrations in China," IJERPH, MDPI, vol. 19(23), pages 1-12, December.
    19. Wu, Rongxin & Tan, Zhizhou & Lin, Boqiang, 2023. "Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China's iron and steel industry," Energy, Elsevier, vol. 277(C).
    20. Wenwen Zhang & Shichun Xu & Zhengxia He & Basil Sharp & Bin Zhao & Shuxiao Wang, 2019. "Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare," Sustainability, MDPI, vol. 11(19), pages 1-21, September.
    21. Goulder, Lawrence H. & Long, Xianling & Lu, Jieyi & Morgenstern, Richard D., 2020. "China’s Unconventional Nationwide CO₂ Emissions Trading System: The Wide-Ranging Impacts of an Implicit Output Subsidy," RFF Working Paper Series 20-02, Resources for the Future.

    More about this item

    Keywords

    Climate change; carbon market; China;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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