Abstract
A comparison of the European Union (EU) and China’s emission trading schemes (ETS) is made and we analyze a field survey concerning the pilot ETS in China. The comparison shows that EU’s carbon market is relative mature, given that EU has adopted more flexible and market based measures for its ETS. In China there are more governmental interventions to make the ETS work, but there is lack of a legal foundation and market measures for China’s ETS. The survey yielded information on the attitudes of the participants towards ETS and the linkages between carbon price and the actions by ETS participants to diminish carbon emissions. The survey results show that most participants are willing to participate in ETS and that the ETS does have positive impact on the reduction of CO2 emission. However China is not yet well prepared to move from seven small pilot ETS to a nationwide ETS, since relevant laws and regulations are not well formulated. This also explains why there are much governmental interventions for the 7 pilot ETS in China. The survey result shows that the existing carbon price in China is too low to mobilise industrial investment in abatement technology.
Highlights
The idea behind the system is that the market price for CO2 emission trading rights is so high that efficient investments in CO2 emission reduction are made if that is cheaper than buying the rights, which would often be the case in developing countries where very few investments in cleaner production have been made so far
There are many differences between European Union (EU) emission trading schemes (ETS) and China’s 7 pilot ETSs. It seems that carbon market is relatively mature in EU, while China’s carbon market is still in a very early stage of development
Survey findings reported in this paper indicate that there is too much governmental intervention in the ETS and there is lack of flexible and effective measures to manage market supply and price in China
Summary
The Chinese president has made it clear during the Paris climate change conference in December 2015 that China’s CO2 emission will decrease (reach its peak) by 2030 in absolute term and will decrease by 18% by 2010 in relative. The question is whether three years after creating a relatively small market for CO2 emissions in China (in terms of quantities traded and the number of participants), can the market become a national one in just two or three years?. The idea behind the system is that the market price for CO2 emission trading rights is so high that efficient investments in CO2 emission reduction are made if that is cheaper than buying the rights, which would often be the case in developing countries where very few investments in cleaner production have been made so far. We conducted a field survey of Beijing pilot ETS in the 2nd half of 2016, while China was preparing the nationwide ETS. Our objective is to come up with recommendations for China how to integrate the national CO2 market, based on experiences elsewhere in the world
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