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UBC Theses and Dissertations

Governing China’s domestic carbon market Liang, Wenqin

Abstract

In March 2011, the Chinese government unveiled a plan to establish a domestic cap-and-trade carbon market. In line with this policy, the NDRC designated five cities (Beijing, Chongqing, Shanghai, Tianjin and Shenzhen) and two provinces (Guangdong and Hubei) as pilot regions for emissions trading. Collectively accounting for 27.4% of China’s national GDP and 18.4% of its population, the seven pilot cap-and-trade markets are already in operation and are in the process of testing a potential future nationwide cap-and-trade market. This thesis examines the Chinese government’s decision to adopt domestic cap-and-trade as the process through which to lead China towards its goal of regulating GHG emissions. It explores the challenges that lie ahead and the adjustments that would be needed for the successful governance of the nascent cap-and-trade markets. Among the complex array of issues related to developing a cap-and-trade system, this thesis focuses primarily on the regulatory and oversight regimes, and employs an analytical framework based on the “good governance” criteria of accountability, cost-effectiveness, rule of law, transparency, and participation. The thesis proceeds as follows: The first chapter is the Introduction. It provides background with respect to the study, a review of the literature, and defines the primary research questions and methodology. Chapter Two describes the different types of carbon markets. Chapter Three investigates the evolution of China’s climate policy and the reason China adopts domestic carbon trading. Chapter Four provides a preliminary assessment of the current implementation policies of the cap-and-trade pilots, suggesting that major improvements and developments are needed to ensure the success of governing the carbon markets. Chapter Five analyzes the critical issues and potential obstacles involved in governing China’s cap-and-trade market by drawing on lessons from international practices as well as previous environmental regulatory experiments that have been implemented in China over the past 20 years. Chapter Six discusses the implications of governing China’s carbon market for China’s environmental protection practice. The last chapter presents some conclusions.

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Attribution-NonCommercial-NoDerivatives 4.0 International

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