Carbon pricing policies in China: Comparative analysis of carbon tax and emission trading systems

Abstract

Carbon pricing has gained significant attention as a market-based approach to tackle carbon emissions and mitigate climate change. In the context of China, the world's largest emitter of carbon dioxide, the implementation of effective carbon pricing policies is of paramount importance. This paper conducts a comparative analysis of China's two primary carbon pricing mechanisms: the carbon tax and the emission trading system (ETS). The analysis delves into the design, implementation, and outcomes of both policies, assessing their effectiveness, challenges, and potential for achieving carbon emission reduction targets. By examining case studies, policy documents, and empirical data, this study aims to provide insights into the strengths and weaknesses of each policy approach, offering recommendations for policymakers and stakeholders to optimize China's carbon pricing strategy and contribute to global climate goals.