In 2009, the Chinese government pledged to reduce its CO2 emissions per unit of GDP by 40 to 45 percent compared to the level of 2005. In its 12th Five-Year Plan (2011-2015), the Chinese government therefore announced its intention to gradually set up a national carbon market. The introduction of an ETS is seen as a key contribution for achieving China’s climate goals. The national government is very active on ETS development in China, it has started the development of seven pilot ETS and is pushing the preparation of a national scheme in parallel. In order to test possible setups for the future nationwide ETS, seven pilot regions have been selected for the pilot phase starting from 2013: the cities of Beijing, Shanghai, Tianjin, Chongqing and Shenzhen, as well as the provinces Guangdong and Hubei.
The intention of the pilot ETS practice is to encourage the cities and provinces to try diversified trading methods and explore the best practice that may contribute to the successful establishment and implementation of a nationwide ETS. The introduction of the national trading scheme has been postponed to the phase of the 13th Five-Year Plan (2016-2020).
The developments and experiences during the pilot phase will substantially contribute to the setup of the national ETS in China. Hence, a successful course of the pilot phase will be crucial for the establishment of the national ETS.
The project “Capacity Building for the Establishment of ETS in China” takes the importance of the pilot phase into account. Thanks to the successful participation in the Clean Development Mechanism (CDM), China is already familiar with the mechanisms of the carbon market. However, there is yet no practical experience in the conception, establishment and implementation of GHG-emissions trading schemes. Representatives of the selected pilot regions have repeatedly stated their interest in German and European know-how and expertise. During an informational visit of representatives of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) to Beijing, Shanghai, Shenzhen and Guangzhou in March 2012, representatives in the pilot regions voiced this interest in exchanging experiences and best practices.