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From Local Carbon Emissions Pilots to the National Carbon Emissions Trading Scheme in China

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  • Dai, C.
  • Pollitt, M. G.

Abstract

This paper discusses China's move from local carbon markets (CL-ETS) to a national carbon market (CN-ETS). We explore the challenge of expanding the CN-ETS to include sectors already covered in some of the CL-ETSs. We do this in three ways. First, through a systematic review of relevant policy documents and market data, the study analyzes the background and development process of the CN-ETS. Second, in-depth interviews with 22 industry experts are conducted to gather insights from various stakeholders regarding industry expansion and data quality issues, forming a multidimensional understanding of the market's status. Finally, quantitative analysis methods are used to statistically analyze the collected data and explore the impact of different factors on the development of the CN-ETS. We find that the CN-ETS currently faces challenges in industry expansion, such as insufficient data quality and complex accounting, which directly affect the market's effective operation. Experts differ in their views on the possible speed of expansion. However, we identify 2034 as a crucial date for the achievement of a comprehensive strengthening of the CN-ETS, in the light of the implementation of the European Union's Carbon Border Adjustment Mechanism (CBAM).

Suggested Citation

  • Dai, C. & Pollitt, M. G., 2024. "From Local Carbon Emissions Pilots to the National Carbon Emissions Trading Scheme in China," Cambridge Working Papers in Economics 2460, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2460
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    More about this item

    Keywords

    Emission Trading System (ETS); Carbon Border Adjustment Mechanism (CBAM); European Union Emissions Trading System (EU ETS); China's national Emissions Trading System (CN-ETS); China's local Emissions Trading System (CL-ETS);
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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