Emissions Trading in California: Lessons for China

88 Pages Posted: 6 Jul 2022

See all articles by Alex Wang

Alex Wang

University of California, Los Angeles (UCLA) - School of Law

Daniel Carpenter-Gold

University of California, Los Angeles (UCLA) - School of Law

Siyi Shen

UCLA School of Law - UCLA School of Law

Andria So

UCLA School of Law - UCLA School of Law

Date Written: June 17, 2022

Abstract

This report evaluates California’s two major emissions trading systems (ETS): (i) the Regional Clean Air Incentives Market (RECLAIM) program for conventional air pollutants in southern California, begun in 1993 and now being retired; and (ii) the economy-wide greenhouse gas cap-and-trade program commenced in 2013 and authorized through 2030. We consider these systems in the context of broader critiques about emissions trading systems and take seriously problems of environmental ambition, integrity, and justice. We also explore ways in which emissions trading systems can affect the political economy of climate policy for better or worse.

This report was written with an audience of Chinese regulators and researchers in mind, as China has recently commenced the world’s largest ETS by volume of emissions covered. The material on California is meant to support the design and reform of this system. We have also included a chapter summarizing the current structure of China’s national ETS and offered a series of reform recommendations, drawing on lessons from California.

We hope that a frank assessment of the benefits and shortcomings of emissions trading will allow China and other jurisdictions to avoid the mistakes of existing ETS and to find an appropriate balance among emissions trading and a broader portfolio of climate measures.

Keywords: China, California, emissions trading, climate change

Suggested Citation

Wang, Alex and Carpenter-Gold, Daniel and Shen, Siyi and So, Andria, Emissions Trading in California: Lessons for China (June 17, 2022). Available at SSRN: https://ssrn.com/abstract=4139727 or http://dx.doi.org/10.2139/ssrn.4139727

Alex Wang (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
1242 Law Building, Room 3382
Los Angeles, CA 90095-1476
United States

Daniel Carpenter-Gold

University of California, Los Angeles (UCLA) - School of Law ( email )

CA
United States

Siyi Shen

UCLA School of Law - UCLA School of Law ( email )

Andria So

UCLA School of Law - UCLA School of Law ( email )

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