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From Pilot to the National Emissions Trading Scheme in China: International Practice and Domestic Experiences

Author

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  • Jun Dong

    (School of Economics and Management, North China Electric Power University, Changping District, Huilongguan, Beinong Road, No. 2, Beijing 102206, China)

  • Yu Ma

    (School of Economics and Management, North China Electric Power University, Changping District, Huilongguan, Beinong Road, No. 2, Beijing 102206, China)

  • Hongxing Sun

    (School of Economics and Management, North China Electric Power University, Changping District, Huilongguan, Beinong Road, No. 2, Beijing 102206, China)

Abstract

In order to tackle climate change and build a low-carbon economy, China has selected seven provinces and cities as carbon trading pilots and plans to establish the national emissions trading scheme (ETS) in 2017. However, since China has not yet reached peak carbon emissions, and as a major developing country, the conflict between increasing energy demand and the requirement to reduce emissions brings challenges to the design of a national ETS suitable for China’s development. In this paper, we summarize the current situation of China’s seven ETS pilots with respect to coverage, allowance allocation, transactions, punishment mechanisms and especially the market performance. By analyzing the common practice of three international mandatory schemes, combined with China’s current circumstances and characteristics of market construction and regulation, we emphasize China’s own economic reality, and propose several recommendations for building a suitable and effective national ETS. This paper could provide new perspectives towards scheme design for China and other similar countries.

Suggested Citation

  • Jun Dong & Yu Ma & Hongxing Sun, 2016. "From Pilot to the National Emissions Trading Scheme in China: International Practice and Domestic Experiences," Sustainability, MDPI, vol. 8(6), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:6:p:522-:d:71122
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    References listed on IDEAS

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    Cited by:

    1. Jiali Zheng & Han Qiao & Shouyang Wang, 2017. "The Effect of Carbon Tax in Aviation Industry on the Multilateral Simulation Game," Sustainability, MDPI, vol. 9(7), pages 1-24, July.
    2. Duojiao Tan & Bilal & Simon Gao & Bushra Komal, 2020. "Impact of Carbon Emission Trading System Participation and Level of Internal Control on Quality of Carbon Emission Disclosures: Insights from Chinese State-Owned Electricity Companies," Sustainability, MDPI, vol. 12(5), pages 1-14, February.
    3. Jiangyue Joy Ying & Benjamin K. Sovacool, 2021. "A fair trade? Expert perceptions of equity, innovation, and public awareness in China’s future Emissions Trading Scheme," Climatic Change, Springer, vol. 164(3), pages 1-23, February.
    4. Huiqin Jiang & Xinxiao Shao & Xiao Zhang & Jianqiang Bao, 2017. "A Study of the Allocation of Carbon Emission Permits among the Provinces of China Based on Fairness and Efficiency," Sustainability, MDPI, vol. 9(11), pages 1-17, November.
    5. Weng, Qingqing & Xu, He, 2018. "A review of China’s carbon trading market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 613-619.
    6. Chen, Shuyang & Wang, Can, 2023. "Inequality impacts of ETS penalties: A case study on the recent Chinese nationwide ETS market," Energy Policy, Elsevier, vol. 173(C).
    7. Chune Young Chung & Minkyu Jeong & Jason Young, 2018. "The Price Determinants of the EU Allowance in the EU Emissions Trading Scheme," Sustainability, MDPI, vol. 10(11), pages 1-29, November.
    8. Zhang, Peng & Yin, Guangzhi & Duan, Maosheng, 2020. "Distortion effects of emissions trading system on intra-sector competition and carbon leakage: A case study of China," Energy Policy, Elsevier, vol. 137(C).
    9. Yidan Chen & Yuwei Sun & Can Wang, 2018. "Influencing Factors of Companies’ Behavior for Mitigation: A Discussion within the Context of Emission Trading Scheme," Sustainability, MDPI, vol. 10(2), pages 1-15, February.
    10. Baochen Yang & Chuanze Liu & Yunpeng Su & Xin Jing, 2017. "The Allocation of Carbon Intensity Reduction Target by 2020 among Industrial Sectors in China," Sustainability, MDPI, vol. 9(1), pages 1-19, January.
    11. Haoran Zhang & Rongxia Zhang & Guomin Li & Wei Li & Yongrok Choi, 2019. "Sustainable Feasibility of Carbon Trading Policy on Heterogenetic Economic and Industrial Development," Sustainability, MDPI, vol. 11(23), pages 1-18, December.

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