Making Sense of Carbon Market Development in China

China has recently begun promoting market-oriented policy instruments to reduce carbon emissions as part of its domestic climate strategy. A centerpiece of this new policy approach has been the launch of pilot carbon markets in seven distinct regions. Based on extensive field visits to all pilot markets under development, this analysis assesses the implications of this “bottom-up” approach to carbon market development for the prospects for nationwide carbon trading in China. It concludes that initiating carbon trading in the seven regions across China with insufficient capacity building, an extremely compressed time frame, and little bureaucratic coordination has engendered challenges for the development of a national carbon market. Nevertheless, these pilots have advanced the prospects for sustained climate action in China at the local Level through their contribution to indigenous technical and human capacity as well as through engaging new stakeholders, including domestic and international actors, supportive of the development of an eventual national trading scheme.

A number of push and pull factors have galvanized climate action in China to date. The push factors include the escalating international pressure on China as the world’s largest and fastest growing CO2 emitter to reduce its carbon footprint and the country’s deepening concern about its vulnerability to the impacts of climate change. Pull factors derive from the country’s international and domestic interest in climate action. On the international front, climate action enables Beijing to project an image of arising China as a “responsible stakeholder.” Domestically,climate action is increasingly seen as an opportunity for the country to gain control of the“commanding heights” of the 21st century by building a competitive green economy, rather than as a drag on China’s development. This change in perspective has been the impetus for China to become the world’s largest investor in clean energy and also the world’s top exporter of renewable energy equipment and components.

In response to these push and pull factors, the Chinese government has launched a set of aggressive climate initiatives, almost all of which have been state-driven and have displayed serious shortcomings. In general, these initiatives fall into three categories: energy efficiency campaigns, renewable and clean energy expansion, and mandatory emissions reduction targets.


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Copyright: © Lexxion Verlagsgesellschaft mbH
Quelle: Issue 03/2013 (September 2013)
Seiten: 19
Preis inkl. MwSt.: € 41,65
Autor: Bo Kong
Ph.D. Carla Freeman

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