Carbon Emissions Trading in China: The Evolution from Pilots to a Nationwide Scheme

41 Pages Posted: 2 May 2015

See all articles by ZhongXiang Zhang

ZhongXiang Zhang

Tianjin University - Ma Yinchu School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 30, 2015

Abstract

The Chinese central government has approved the seven pilot carbon trading schemes. These seven pilot regions are deliberately selected to be at varying stages of development and are given considerable leeway to design their own schemes. These pilot trading schemes have features in common, but vary considerably in their approach to issues such as the coverage of sectors, allocation of allowances, price uncertainty and market stabilization, potential market power of dominated players, use of offsets, and enforcement and compliance. This article explains why China opts for emissions trading, rather than carbon or environmental taxes at least initially, discusses the key common and varying features of these carbon trading pilots and their first-year performance, draws the lessons learned, discusses the potential pathways for evolution of regional pilot carbon trading schemes into a nationwide carbon trading scheme, and raises fundamental issues that must be addressed in order to make such an emissions trading scheme to work reliably and effectively and with an increasingly expanded coverage and scope.

Keywords: Pilot Carbon Trading Schemes, Environmental Taxes, Compliance, Carbon Offsets, Energy Prices, China

JEL Classification: H23, O13, P28, Q43, Q48, Q52, Q54, Q58

Suggested Citation

Zhang, ZhongXiang, Carbon Emissions Trading in China: The Evolution from Pilots to a Nationwide Scheme (April 30, 2015). FEEM Working Paper No. 038.2015. Available at SSRN: https://ssrn.com/abstract=2600909 or http://dx.doi.org/10.2139/ssrn.2600909

ZhongXiang Zhang (Contact Author)

Tianjin University - Ma Yinchu School of Economics ( email )

92 Weijin Road, Nankai District
Tianjin 300072
China
+86 22 87370560 (Phone)

HOME PAGE: http://ideas.repec.org/f/pzh243.html

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