IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i18p11399-d912280.html
   My bibliography  Save this article

China’s Carbon Market in the Context of Carbon Neutrality: Legal and Policy Perspectives

Author

Listed:
  • Haiqing Hao

    (School of Law, Qingdao University, Qingdao 266071, China)

  • Xue Yang

    (School of Law, Qingdao University, Qingdao 266071, China)

Abstract

China’s carbon market covers a huge amount of emissions, but the effects of emission reduction in the early stages are limited. This study explores the regulation of policies and laws on the carbon market through doctrinal and empirical research in the field of law. The study reveals that although the national carbon market witnessed a considerable quota trading volume, the peak of trading is concentrated and accompanied by a high compliance rate. The total amount of quotas in the first compliance cycle is too large, coupled with a single trading product, and participants in the early stage fail to activate the carbon market, making it difficult to form the carbon pricing mechanism in the market. The legal factors behind this phenomenon are related to the total amount setting mode and the construction route from simple to complex. Based on the above analysis, this study concludes with the following path to improve China’s legislation. To comply with cap and trade, China must improve the setting mechanism of total quotas to form an investment field that participates in multiple entities; effectively play the role of carbon trading in market regulation; and guarantee smooth operation through penalty and reward coordination and a unified MRV mechanism.

Suggested Citation

  • Haiqing Hao & Xue Yang, 2022. "China’s Carbon Market in the Context of Carbon Neutrality: Legal and Policy Perspectives," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:18:p:11399-:d:912280
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/18/11399/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/18/11399/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yawen Li & Yushan Yang & Guorong Luo & Jizhou Huang & Tian Wu, 2022. "The Economic Recovery from Traffic Restriction Policies during the COVID-19 through the Perspective of Regional Differences and Sustainable Development: Based on Human Mobility Data in China," Sustainability, MDPI, vol. 14(11), pages 1-23, May.
    2. Yi Yao & Lixin Tian & Guangxi Cao, 2022. "The Information Spillover among the Carbon Market, Energy Market, and Stock Market: A Case Study of China’s Pilot Carbon Markets," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    3. Yizhang He & Wei Song, 2022. "Analysis of the Impact of Carbon Trading Policies on Carbon Emission and Carbon Emission Efficiency," Sustainability, MDPI, vol. 14(16), pages 1-20, August.
    4. Kim, Dong-Hyeon & Suen, Yu-Bo & Lin, Shu-Chin, 2019. "Carbon dioxide emissions and trade: Evidence from disaggregate trade data," Energy Economics, Elsevier, vol. 78(C), pages 13-28.
    5. Zhao, Xin-gang & Jiang, Gui-wu & Nie, Dan & Chen, Hao, 2016. "How to improve the market efficiency of carbon trading: A perspective of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1229-1245.
    6. Xin-Wei Li & Hong-Zhi Miao, 2022. "How to Incorporate Blue Carbon into the China Certified Emission Reductions Scheme: Legal and Policy Perspectives," Sustainability, MDPI, vol. 14(17), pages 1-15, August.
    7. Ruiqi Wang & Huanchen Tang & Xin Ma, 2022. "Can Carbon Emission Trading Policy Reduce PM2.5? Evidence from Hubei, China," Sustainability, MDPI, vol. 14(17), pages 1-21, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiangnan Zhai & Xue Yang & Darko B. Vukovic & Daria A. Dinets & Qiang Liu, 2025. "Carbon Emissions Trading Policy and Regional Energy Efficiency: A Quasi-Natural Experiment from China," Energies, MDPI, vol. 18(5), pages 1-20, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhou, Bo & Zhang, Cheng & Wang, Qunwei & Zhou, Dequn, 2020. "Does emission trading lead to carbon leakage in China? Direction and channel identifications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    2. Wei Sun & Junjian Zhang, 2020. "Carbon Price Prediction Based on Ensemble Empirical Mode Decomposition and Extreme Learning Machine Optimized by Improved Bat Algorithm Considering Energy Price Factors," Energies, MDPI, vol. 13(13), pages 1-22, July.
    3. Zhao, Xin-gang & Wu, Lei & Li, Ang, 2017. "Research on the efficiency of carbon trading market in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1-8.
    4. Yanping Liu & Bo Yan, 2024. "Spillover effects of carbon, energy, and stock markets considering economic policy uncertainty," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(3), pages 563-591, September.
    5. Xu, Guangyue & Dong, Haoyun & Xu, Zhenci & Bhattarai, Nishan, 2022. "China can reach carbon neutrality before 2050 by improving economic development quality," Energy, Elsevier, vol. 243(C).
    6. Kailun Fang & Suzana Ariff Azizan & Yifei Wu, 2023. "Low-Carbon Community Regeneration in China: A Case Study in Dadong," Sustainability, MDPI, vol. 15(5), pages 1-15, February.
    7. Fatima Bibi & Muhammad Jamil, 2025. "Trade and environmental quality: a spatial econometric approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 18251-18273, August.
    8. András Szeberényi & Tomasz Rokicki & Árpád Papp-Váry, 2022. "Examining the Relationship between Renewable Energy and Environmental Awareness," Energies, MDPI, vol. 15(19), pages 1-25, September.
    9. Cong, Ren & Lo, Alex Y., 2017. "Emission trading and carbon market performance in Shenzhen, China," Applied Energy, Elsevier, vol. 193(C), pages 414-425.
    10. Zheng, Yan & Zhou, Min & Wen, Fenghua, 2021. "Asymmetric effects of oil shocks on carbon allowance price: Evidence from China," Energy Economics, Elsevier, vol. 97(C).
    11. Bin Xiong & Qi Sui, 2023. "Does Carbon Emissions Trading Policy Improve Inclusive Green Resilience in Cities? Evidence from China," Sustainability, MDPI, vol. 15(17), pages 1-16, August.
    12. Jiawen Liu & Yue Liu & Jiayi Wang & Xinyue Chen & Liyuan Deng, 2025. "Valuing Carbon Assets for Sustainability: A Dual-Approach Assessment of China’s Certified Emission Reductions," Sustainability, MDPI, vol. 17(11), pages 1-20, May.
    13. Jin, Gui & Shi, Xin & Zhang, Lei & Hu, Shougeng, 2020. "Measuring the SCCs of different Chinese regions under future scenarios," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    14. Song, Yazhi & Liu, Tiansen & Liang, Dapeng & Li, Yin & Song, Xiaoqiu, 2019. "A Fuzzy Stochastic Model for Carbon Price Prediction Under the Effect of Demand-related Policy in China's Carbon Market," Ecological Economics, Elsevier, vol. 157(C), pages 253-265.
    15. Chang, Chia-Lin & Mai, Te-Ke & McAleer, Michael, 2019. "Establishing national carbon emission prices for China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 106(C), pages 1-16.
    16. Yiqun Wu & Yuan Sun & Congyue Zhou & Yonghua Li & Xuanli Wang & Huifang Yu, 2023. "Spatial–Temporal Characteristics of Carbon Emissions in Mixed-Use Villages: A Sustainable Development Study of the Yangtze River Delta, China," Sustainability, MDPI, vol. 15(20), pages 1-21, October.
    17. Wu, Xiaofei & Ma, Jie & Gao, Yanyan & Li, Bin & Chen, Xueli & Song, Malin, 2023. "Policy uncertainty and air pollution: Evidence from the turnover of local officials in China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 532-543.
    18. Wu, Xiaoping & Liu, Peng & Yang, Lin & Shi, Zhuangfei & Lao, Yongshuai, 2024. "Impact of three carbon emission reduction policies on carbon verification behavior: An analysis based on evolutionary game theory," Energy, Elsevier, vol. 295(C).
    19. Xiaoqing Ai & Yuchan Jin, 2025. "Analysis of the Impact and Mechanism of Carbon Trading Pilot Policies on the Urban-Rural Income Gap," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 15(6), pages 1-8.
    20. Yue-Jun Zhang & Jing-Yue Liu, 2019. "Does carbon emissions trading affect the financial performance of high energy-consuming firms in China?," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 91-111, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:18:p:11399-:d:912280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.