Abstract
An Emissions Trading System (ETS) is a market-based tool for controlling greenhouse gas emissions and has been used by many countries or regions. Built on the results of previous carbon market pilots, China plans to launch a nationwide ETS in 2017. This paper analyzes the main features of China’s National ETS design and the causes of the features, identifies the major issues and challenges that need to be addressed. The National ETS consists of a central-level system and provincial systems. The design not only attaches great importance to the uniformity of trading rules but also provides the provincial authorities a certain degree of autonomy. It sets carbon intensity targets and industrial benchmark based on historical emission rates of industries, issues free emission allowances to corporate legal entities, and includes indirect emissions in the system. The basic statistical unit of the ETS is corporate legal entities. At present, China’s National ETS faces the following major problems and challenges: lack of higher-level legislation; inconsistency in data requirements between the monitoring, reporting and verification (MRV) rules and the benchmarking rules, and lack of effective mechanism to link the ETS to other energy and climate policies. China should pass higher-level legislation for the National ETS as soon as possible, develop operational rules to regulate the allocation of emission allowances, MRV, certification of third-party verification agencies, compliance by companies, trading of emission allowances and other important activities under the ETS, dovetail ETS rules and financial industry supervision and budgeting regulations and develop a mechanism to correlate the ETS and other energy and climate policies.
Maosheng Duan is a research fellow and Ph.D. supervisor at Institute of Nuclear and New Energy Technology, Tsinghua University. Duan’s research interests include climate policy. Zhe Deng, Mengyu Li, and Dongya Li are Ph.D. students at Institute of Nuclear and New Energy Technology, Tsinghua University.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Wang, B. (2015). Development and legislation of emissions trading in China. Present Day Law Science,2015(2), 13.
NDRC. Notice on Launching the National Emissions Trading Market (Climate Document of National Development and Reform Commission [2016] No. 57). Retrieved January 11, 2016, from http://qhs.ndrc.gov.cn/qjfzjz/201601/t20160122_791850.html.
Duan, M., Li, D., & Li, M. (2017). Development of emissions trading markets. In X., Zhang & W., Qi (Ed.), China low-carbon development report (2017). Social Sciences Academic Press, p. 89.
NDRC. Interim measures for the management of emissions trading. Retrieved December 10, 2014, from http://qhs.ndrc.gov.cn/qjfzjz/201412/t20141212_697046.html.
Zeng, X., Li, Y., & Zhang, W. (2016). MRV systems of China’s emissions market pilots: practices and inspirations. Progress on Environmental Economics,2016(1), 132.
NDRC. Stepping up climate actions—China’s Nationally determined contributions. Retrieved June 30, 2015, from http://www.ndrc.gov.cn/gzdt/201506/t20150630_710226.html.
Announcement of the national ETS allowances allocation plan (Draft). Retrieved May 9, 2017, from http://www.ideacarbon.org/archives/39381.
NDRC. The 13th five-year plan for renewable energy development. Retrieved December 2016, from http://www.ndrc.gov.cn/zcfb/zcfbtz/201612/W020161216659579206185.pdf.
NDRC. Paid right to use energy and trading pilot program. Retrieved from July 23, 2016, from http://hzs.ndrc.gov.cn/newzwxx/201609/W020160921341164855785.pdf.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Social Sciences Academic Press and Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Duan, M., Deng, Z., Li, M., Li, D. (2020). Issues Concerning the Design of China’s National Emissions Trading System. In: Wang, W., Liu, Y. (eds) Annual Report on China’s Response to Climate Change (2017). Research Series on the Chinese Dream and China’s Development Path. Springer, Singapore. https://doi.org/10.1007/978-981-13-9660-1_9
Download citation
DOI: https://doi.org/10.1007/978-981-13-9660-1_9
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-13-9659-5
Online ISBN: 978-981-13-9660-1
eBook Packages: Economics and FinanceEconomics and Finance (R0)