Research on China’s cap-and-trade carbon emission trading scheme: Overview and outlook

• Published in: Applied energy Vol. 178; pp. 902 - 917
• Main Authors: Jiang, Jingjing, Xie, Dejun, Ye, Bin, Shen, Bo, Chen, Zhanming
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 15.09.2016
• Subjects: business enterprises; Cap-and-trade ETS; carbon markets; China; climate change; Consensus and controversy; issues and policy; Overview; politics; Research outlook; China; Cap-and-trade ETS; Overview; Consensus and controversy; Research outlook; China
• ISSN: 0306-2619; 1872-9118
• DOI: 10.1016/j.apenergy.2016.06.100

•A full and concise review of the literatures on China’s ETS.•Mechanism design, coordination and linkage and impact assessment are involved.•Policy suggestions are offered for devising China’s nationwide ETS.•Pressing research areas in the future are identified. With important implications for global climate change mitigation, the development of a cap-and-trade emission trading scheme (ETS) in China is embedded in distinctive political, economic, and institutional contexts and has been attracting increasing attention in recent years. To offer a clear perspective on current research progress, this paper systematically reviews the recent literature on China’s ETS from three main aspects: mechanism design, policy and regional linkages, as well as impact assessment. The current research consensuses are summarized based upon detailed literature analyses and commentaries, and together with observations of international experience and China’s actual condition, the paper provides policy proposals for the development of China’s national ETS during 2016–2020. Finally, several important controversies in the current literature are discussed with regard to the practical demands of China’s ETS development. Five pressing topics that need to be further studied in the coming years are highlighted, including cap setting, allowance allocation among sectors and enterprises, carbon pricing, policy package and unified carbon market construction, as well as ex-ante and ex-post impact assessments.