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Why Has China not Embraced a Global Cap-and-Trade Regime?

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  • Zhang, ZhongXiang

Abstract

Many economic studies suggest that China would reap significant benefits from participating in a global cap-and-trade regime. The question then is that even if such a regime is so beneficial to China, why China has consistently refused in international negotiations even to discuss its participation in it. In this paper, we look at this issue from the following perspectives: a) from the point of view of fairness, how do developing countries including China and India perceive emissions caps in the first place?; b) why have China and India been sceptical to international emissions trading?; c) how is an inflow of CDM investment in China perceived politically in comparison with the exports of emissions permits to the U.S.?; d) what are the implications of “lock in” to emissions cap, in particular no rules and principles for setting emissions targets for the commitment periods subsequent to Kyoto?; e) how to address the complex undertaking of setting emissions caps for developing countries, which must be linked to future, unobserved levels in comparison with the historically observed levels for industrialized countries?. To our knowledge, this is the first paper to analyse why China has not embraced an international greenhouse gas emissions trading scheme, thus pointing out efforts/directions towards getting the country into such a scheme. Thus, the paper is of significant policy relevance.

Suggested Citation

  • Zhang, ZhongXiang, 2003. "Why Has China not Embraced a Global Cap-and-Trade Regime?," MPRA Paper 12783, University Library of Munich, Germany, revised Jul 2007.
  • Handle: RePEc:pra:mprapa:12783
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    References listed on IDEAS

    as
    1. ZhongXiang Zhang, 2000. "Estimating the size of the potential market for the Kyoto flexibility mechanisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(3), pages 491-521, September.
    2. Zhang, ZhongXiang, 2004. "Meeting the Kyoto targets: the importance of developing country participation," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 3-19, January.
    3. Andreas Löschel & Zhong Zhang, 2002. "The economic and environmental implications of the US repudiation of the kyoto protocol and the subsequent deals in Bonn and Marrakech," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(4), pages 711-746, December.
    4. Zhang, ZhongXiang, 1998. "Greenhouse gas emissions trading and the world trading system," MPRA Paper 12971, University Library of Munich, Germany.
    5. Warwick J. McKibbin, 2004. "Climate Change Policy for India," ASARC Working Papers 2004-03, The Australian National University, Australia South Asia Research Centre.
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    Citations

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

    1. Zhang, Zhong Xiang, 2012. "Competitiveness and Leakage Concerns and Border Carbon Adjustments," International Review of Environmental and Resource Economics, now publishers, vol. 6(3), pages 225-287, December.
    2. Wei Jin & ZhongXiang Zhang, 2016. "China's pursuit of environmentally sustainable development: Harnessing the new engine of technological innovation," CCEP Working Papers 1601, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
    3. ZhongXiang Zhang, 2012. "Climate Change Meets Trade in Promoting Green Growth: Potential Conflicts and Synergies," Chapters,in: Responding to Climate Change, chapter 6 Edward Elgar Publishing.
    4. Zhang, ZhongXiang, 2010. "Is it fair to treat China as a Christmas tree to hang everybody's complaints? Putting its own energy saving into perspective," Energy Economics, Elsevier, vol. 32(Supplemen), pages 47-56, September.
    5. ZhongXiang Zhang, 2010. "The U.S. proposed carbon tariffs, WTO scrutiny and China’s responses," International Economics and Economic Policy, Springer, vol. 7(2), pages 203-225, August.
    6. Zhang, ZhongXiang, 2009. "Multilateral trade measures in a post-2012 climate change regime? What can be taken from the Montreal Protocol and the WTO?," Energy Policy, Elsevier, vol. 37(12), pages 5105-5112, December.
    7. ZhongXiang Zhang, 2015. "Crossing the river by feeling the stones: the case of carbon trading in China," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(2), pages 263-297, April.
    8. Alex Y. Lo & Michael Howes, 2015. "Power and Carbon Sovereignty in a Non-Traditional Capitalist State: Discourses of Carbon Trading in China," Global Environmental Politics, MIT Press, vol. 15(1), pages 60-82, February.
    9. Wei Jin & ZhongXiang Zhang, 2014. "From Energy-intensive to Innovation-led Growth: On the Transition Dynamics of China’s Economy," Working Papers 2014.100, Fondazione Eni Enrico Mattei.
    10. Zhongxiang Zhang, 2011. "In what format and under what timeframe would China take on climate commitments? A roadmap to 2050," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 245-259, September.
    11. Rose, Adam & Wei, Dan, 2008. "Greenhouse gas emissions trading among Pacific Rim countries: An analysis of policies to bring developing countries to the bargaining table," Energy Policy, Elsevier, vol. 36(4), pages 1420-1429, April.
    12. Jin, Wei & Zhang, ZhongXiang, 2014. "Quo Vadis? Energy Consumption and Technological Innovation," Working Papers 249494, Australian National University, Centre for Climate Economics & Policy.
    13. Wei Jin & ZhongXiang Zhang, 2014. "Quo Vadis? Energy Consumption and Technological Innovation in China's Economic Growth," CCEP Working Papers 1412, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
    14. Cong, Ren & Lo, Alex Y., 2017. "Emission trading and carbon market performance in Shenzhen, China," Applied Energy, Elsevier, vol. 193(C), pages 414-425.
    15. Zhang, ZhongXiang, 2009. "Encouraging developing country involvement in a post-2012 climate change regime: carrots, sticks or both?," MPRA Paper 13174, University Library of Munich, Germany.

    More about this item

    Keywords

    Cap-and-trade regime; Clean development mechanism; International climate negotiations; Kyoto Protocol; China; India;

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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