Emissions trading in China: Progress and prospects

Zhang, Da; Karplus, Valerie J.; Cassisa, Cyril; Zhang, Xiliang

doi:10.1016/j.enpol.2014.01.022

Cited by 210 publications

(97 citation statements)

References 5 publications

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“…For example, the China regional level ETSs have been implemented in seven provinces as pilot schemes since 2013 [26][27][28]. The electricity sector in China is also heavily regulated by the government, and the carbon costs cannot be easily passed on to consumers, which may be a cause of market distortions [6,27,28]. Another important consideration for including indirect emissions is that in some provinces, indirect emissions (occurring by using electricity imported from other provinces) account for a significant share of total emissions [27].…”

Section: Distinctive Features Of the Korean Etsmentioning

confidence: 99%

Section: Distinctive Features Of the Korean Etsmentioning

confidence: 99%

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Efficiency versus Equality: Comparing Design Options for Indirect Emissions Accounting in the Korean Emissions Trading Scheme

Yeo

Lee

2015

Sustainability

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Abstract:The Korean emissions trading scheme (ETS) has one special characteristic that makes it different from other schemes, such as the EU ETS. While the other schemes consider only direct emissions from fossil fuels, the Korean ETS also regulates indirect emissions arising from the consumption of electricity. The problem of double counting arises under this setting, in which emissions from the power sector can be accounted for twice, when electricity is produced and consumed. This study aims to compare design options on indirect emissions accounting for the Korean ETS using a computable general equilibrium model. Four scenarios are generated for options accounting for direct and/or indirect emissions and are evaluated in terms of efficiency and equality. The result shows that the ETS operates most efficiently when only direct emissions are considered. However, the option that includes both direct and indirect emissions produces a competent result in terms of equality by spreading the economic burden of emissions reduction among industries. We conclude that this option can be an alternative to meet the key purposes of the Korean ETS.

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Section: Distinctive Features Of the Korean Etsmentioning

confidence: 99%

Section: Distinctive Features Of the Korean Etsmentioning

confidence: 99%

Efficiency versus Equality: Comparing Design Options for Indirect Emissions Accounting in the Korean Emissions Trading Scheme

Yeo

Lee

2015

Sustainability

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“…These different contexts have led to marked variations in the design, implementation, and enforcement features of China's carbon emissions trading pilots and other existing ETSs in mature market economies (Duan, Pang, & Zhang, 2014;Ellerman, Convery, & Perthuis, 2010;Munnings, Morgenstern, Wang, & Liu, 2014;Zhang, Karplus, Cassisa, Zhang, 2014;Zhang, 2015b). Indeed, it would be a daunting challenge for China to decide which sectors are to be covered under emissions trading, how to set their emissions caps and allocate permits among companies within the sectors covered, and how to enforce the compliance of regulated entities, to mention just a few.…”

Section: Introductionmentioning

confidence: 99%

Carbon emissions trading in China: the evolution from pilots to a nationwide scheme

Zhang

2015

Climate Policy

150

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The Chinese central government has approved seven pilot carbon trading schemes. These pilot regions have been deliberately selected to be at varying stages of development and are given considerable leeway to design their own schemes. These 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 stabilisation, potential market power of dominated players, use of offsets, and enforcement and compliance. Our study finds that educating the covered entities, strictly enforcing compliance rules, ascribing allowances as financial assets and defining their valid duration, and including non-compliance in the credit record of noncomplying entities are crucial to enabling active participation in carbon emissions trading. Moreover, the retrospective examination of the carbon trading pilots suggests that a national emissions trading scheme (ETS) should at least be based on uniform standards for measuring, reporting, and verification, the allocation of allowances, and the rules of compliance. Until a nationwide carbon market becomes fully functional after 2019, regional ETSs continue to function in parallel but those entities covered in the existing regional ETSs will be unconditionally integrated into a nationwide ETS if they meet the latter's threshold. Policy relevanceThe purpose of launching the seven carbon trading schemes and the reason why these seven pilot regions are given considerable leeway to design their own schemes are to enable China to develop a nationwide ETS with expanding geographical coverage and sectoral scope to complement the administrative means on which China, to date, has predominantly relied to achieve its increasingly stringent energy-saving and carbon intensity goals. This article discusses the lessons that carbon trading pilots have learned either from their own practice or other pilots in the first compliance year, as well as the good practice that the to-be-established national scheme could follow, and discusses the potential pathways for the evolution of regional pilot carbon trading schemes into a nationwide carbon trading scheme. Insights into the design, implementation, and compliance of China's carbon trading pilots and potential pathways help make these pilots work reliably and effectively and will smooth the transition from the pilots to a national ETS.

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“…Several studies focus on the lessons learned from the seven pilot emission trading schemes and compare them with emission trading systems in other countries [6,7]. While equitable allocation among regions, sectors and enterprises is under heated discussion, we cannot neglect that companies are the most direct stakeholders and implementers of carbon market policies [8][9][10].…”

Section: Introductionmentioning

confidence: 99%

Influencing Factors of Companies’ Behavior for Mitigation: A Discussion within the Context of Emission Trading Scheme

2018

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China built pilot carbon emission trading schemes in seven regions and established a national carbon trading market in electricity sector in December 2017. This study conducted a questionnaire survey of 570 companies in 29 regions nationwide and found that companies still need to improve mitigation measures regarding fossil fuel combustion, production technology, output adjustment and environmental management. By establishing regression models, influencing factors of carbon emission reduction are identified. Pilot emission trading policy has a significant impact on company emission reduction behaviors. Companies inside or outside the pilot region respond differently to the influencing factors. Companies inside emphasize more on energy price and mitigation potential, while enterprises outside pay more attention to investment and familiarity with technology and policy.

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Emissions trading in China: Progress and prospects

Cited by 210 publications

References 5 publications

Efficiency versus Equality: Comparing Design Options for Indirect Emissions Accounting in the Korean Emissions Trading Scheme

Efficiency versus Equality: Comparing Design Options for Indirect Emissions Accounting in the Korean Emissions Trading Scheme

Carbon emissions trading in China: the evolution from pilots to a nationwide scheme

Influencing Factors of Companies’ Behavior for Mitigation: A Discussion within the Context of Emission Trading Scheme

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