Emerging Markets’ Carbon Pricing Development: A Comparative Analysis of China and South Korea’s Experience

The transition to low-carbon economies presents unique challenges for emerging markets, particularly in developing effective carbon pricing mechanisms that balance environmental objectives with economic development needs. This study examines the ratio legis of carbon pricing policies through a comparative analysis of China and South Korea’s established systems, utilizing the FASTER (Fairness, Alignment, Stability, Transparency, Economic efficiency, Reliability) principles evaluation framework. Using qualitative doctrinal methodology integrated and comparative policy analysis legislative frameworks and market data from 2015–2023, this paper examines Malaysia as a representative case study wherein carbon market initiatives remain in voluntary phase with approximately 150,000 carbon credits traded. The comparative results demonstrate that a choice between China’s intensity-based approach and South Korea’s absolute cap system should be guided by the following: (1) development stage, with industrializing economies benefiting from China’s flexible model; (2) institutional capacity, where limited monitoring capabilities favor phased approaches; (3) economic structure, with emissions-intensive economies requiring growth-accommodating systems; (4) policy landscape complexity; and (5) market size. The research proposes a structured implementation framework for emerging markets, demonstrated through Malaysia’s context, that enables effective emission reduction while maintaining economic competitiveness during the transition to low-carbon economies.