Abstract
What lessons emerged during the development of China’s national emissions trading scheme (ETS)? It was launched in late 2017 and started operation in July 2021, beginning with online trading of emissions permits. The preceding decade was used for preparing and testing, including seven pilot markets. It was decided to start with the power sector, the largest-emitting sector, and initially cover coal- and gas-fired power plants. This article offers theory-oriented and empirical contributions to domestic-level learning, and asks what happens after a policy has “landed.” We employ an analytical concept originating from diffusion theory—<em>learning</em>—and view <em>internal learning</em> as a key mechanism. We argue that having a slow and well-prepared start contributes to the potential success of the ETS; further, that the lengthy preparatory period enabled China to address various obstacles, providing a strong basis for success, singly and as part of the national mitigation policy complex. <em>Internal learning </em>has proven crucial to the development of the ETS in China, with the learning process continuing as the national ETS becomes operative. We also discuss the possibilities for linking China’s carbon market with other markets, which should heed China’s ETS experience and emphasize learning.
Highlights
Despite concerns that development took longer than expected, and that China’s emissions trading scheme (ETS) might fail to curb emis‐ sions (“Can China’s new carbon market take off?,” 2021; Liu & Kan, 2021), we argue that the slow, well‐prepared start has contributed to the success potentials of China’s ETS
Before turning to China’s specific learning experiences, we offer a glimpse at the larger policy context in which the national ETS is happening
The national ETS is seen as one of several policy tools for reducing greenhouse gas (GHG) emissions, as a key pol‐ icy supplemented by other policies to promoting emis‐ sions mitigation
Summary
Despite concerns that development took longer than expected, and that China’s ETS might fail to curb emis‐ sions (“Can China’s new carbon market take off?,” 2021; Liu & Kan, 2021), we argue that the slow, well‐prepared start has contributed to the success potentials of China’s ETS. In examining the ETS process in China, we employ an analytical concept originating from diffu‐ sion theory: learning. Expanding this concept, we iden‐ tify internal learning as a key mechanism. We have followed ETS developments closely since the announcement in 2011, with interview rounds in China each year, supplemented by participation in ETS workshops and conferences, and personal work experience in multilateral carbon mar‐ ket development projects in China. We direct our attention outwards, linking China’s market with other markets, noting that such markets should heed China’s ETS experience, and emphasize learning
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