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From Carbon Emissions Trading Pilots to National System: The Road Map for China

Maosheng Duan

China is now piloting carbon emissions trading in 7 regions and has decided to establish its national emissions trading system which is expected to be operational by 2017. There are two general roadmaps for this change: a bottom-up approach and a top-down approach. After intensive discussions and careful considerations, including the assessment of the pilot systems, the top-down approach has been chosen, i.e. to establish a system with unified rules applicable to all regions in China. China’s National Development and Reform Commission (NDRC), the country’s ETS authority, published in December 2014 Interim Management Rules on Emissions Trading, laying down the basic rules for China’s national system. The system is characterized by the following aspects: 1) a system with unified rules; 2) two-level management system, i.e. central government and provincial-level governments; 3) central government in charge of rule setting; 4) provincial-level governments in charge of rule implementation; 5) specific flexibilities given to provinces; and 6) comprehensive compliance rules.

Maosheng Duan is a professor at the Research Center for Contemporary Management, Key Research Institute of Humanities and Social Sciences at Universities. He has been leading the draft of management rules for China’s national emissions trading system. The views expressed in this article are nevertheless entirely his own. The writing of this article was supported by the MOE Project of the Key Research Institute of Humanities and Social Sciences at Universities.


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