The Study On Conceptualizing China’s National Emissions Trading Scheme Through Integrating China’s Circumstances With International Experience

Climate change adverse impacts have been growing unprecedentedly in termsof their observed and projected damages. China is severely vulnerable to the negativeinfluence of climate change with regard to its vast population, food production, andeconomic development, just to name a few. Emissions trading scheme (ETS) as amarket-based climate change mitigation policy is getting increasingly more attentionfrom policy makers as an alternative to commend-and-control mechanism in limitinganthropogenic GHG emissions quickly and in a cost-effective manner.This research has employed a comparative approach for a wide range ofliterature and experts interviews as well to achieve the following objectives, reach adeeper understanding of how the European Union scheme (EU ETS), Tokyo scheme(TMG ETS), and Northeast and Mid-Atlantic States of the U.S (RGGI) function;utilize their experiences to optimize China’s pilot emissions trading schemes; pointout the idea of incorporating the concept, of a danger that anthropogenic GHGs wouldpotentially impose when they interfere with the climate system, into the design ofemissions trading scheme; gain insights on how to establish China’s carbon emissionstrading scheme at the national level as fast and efficient as possible; and lay down thefoundation of the possibility of linking China’s national emissions trading schemewith its neighboring countries’ emissions trading schemes.This research has concluded that the EU ETS, TMG ETS and RGGI are notconsistent with Article2of the United Nations Framework Convention on ClimateChange (UNFCCC); China’s emissions trading pilot programs do not have some ofthe foundational elements that capacitate them to be more consistent with Article2;China’s national ETS would be on the path of being more consistent with Article2ifit adopts it as its objective with its three pillars–key vulnerability, the global meansurface temperature increase should not exceed2°C above pre-industrial levels, andIPCC scenario category; employs absolute cap-and-trade that starts with systematicand short-term rewarded voluntary early GHG emissions reduction under thesupervision of the competent authority and then publicize relevant liable entities’reduction plans to get the public involved, and reaching to mandatory scheme thatcovers long-lived anthropogenic and major sources of GHG emissions; and implements an allocation mechanism that begins with grandfathering (consistent withArticle2), then benchmarking (consistent with Article2), and finally reaching toauctioning; and applies MRV system which is operated by the purpose of achievingArticle2of the UNFCCC, the integrity of methodology and continues improvementprinciples, detailed monitoring methodology, a data flow system, and detailedverification regulations.