Abstract
How can the Chinese emissions trading scheme (ETS) be redesigned or improved to better address issues of fairness and equity, innovation and learning, and awareness and social acceptance? In order to meet its 2030 carbon emission reduction pledges, the Chinese government has announced plans for a fully implementable national carbon ETS after 2020. This scheme is set to become the world’s most significant carbon trading market and it could cover half of all Chinese CO2 emissions (as much as 4 billion tons of carbon dioxide). In this study, we qualitatively analyze the Chinese ETS through the lens of three interconnected themes—equity, innovation, and awareness—which are disaggregated into six specific dimensions. We then explore these themes and dimensions with a mixed methods and original research design involving a survey of 68 Chinese experts as well as 34 semi-structured research interviews with respondents from local governments, financial institutions, technology service companies, universities, industries, and civil society groups. We find that uneven economic and social growth could exacerbate any initial permits allocation scheme that could be a cornerstone for an ETS. Substantial technological and institutional uncertainties exist that could also hamper development and enforcement. Low or negative awareness among the public and private sector were identified as also being significant barriers for ETS implementation.
Highlights
Emissions Trading Schemes (ETS) are expected to become one of the most costeffective, or at least popular, mechanisms for mitigating carbon emissions in the future (WGEA 2016)
These operating carbon markets account for approximately 8% of global carbon emissions (ICAP 2019)
How? In this study, we ask: how can the Chinese ETS be redesigned or improved to better address issues of fairness and equity, innovation and learning, and awareness and social acceptance? As an answer, we explore these themes and dimensions with a mixed methods and original research design involving a survey of 68 Chinese experts as well as 34 semistructured research interviews with respondents from local governments, financial institutions, technology service companies, universities, industries, and civil society groups
Summary
Emissions Trading Schemes (ETS) are expected to become one of the most costeffective, or at least popular, mechanisms for mitigating carbon emissions in the future (WGEA 2016). As the world’s largest carbon emitter, China’s response to climate action undoubtedly will shape global emissions trends (Liu et al 2015) Given these dynamics, China has agreed to a 2030 CO2 emissions peak target and CO2 intensity reduction pledge that is said to meet both the Copenhagen and Paris Agreements (Yang et al 2017; Zhou et al 2019a, 2019b). China has agreed to a 2030 CO2 emissions peak target and CO2 intensity reduction pledge that is said to meet both the Copenhagen and Paris Agreements (Yang et al 2017; Zhou et al 2019a, 2019b) To fulfill these international pledges costeffectively, China has stated a strong intention to establish a national carbon trading system (China’s ETS) over the course of its 13th Five-Year-Plan (FYP) spanning from 2016 to 2020 (NDRC 2016; Jotzo et al 2018; Wang et al 2019). It is imperative that China’s ETS appreciates the reality of Chinese emissions trends, and that it anticipates potential challenges if it wishes to play a significant but
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