In recent years, climate protection and the transition to a low-carbon economy became core objectives of the Chinese Government. In 2009, China pledged to cut emissions per unit of GDP by 40-45 per cent by the year 2020 compared to the level in 2005. In 2011, the Chinese government announced to gradually establish a carbon market in China as one instrument to tackle rising carbon emissions. Seven pilot emissions trading systems (ETS) have been in operation since 2013 and 2014; including five cities Beijing, Shanghai, Tianjin, Chongqing and Shenzhen and two provinces Guangdong and Hubei. Fuijian was selected as the eighth pilot ETS in 2016 by the central government. At the end of 2017, NDRC officially launched the nationwide ETS.
NDRC defined the gradual development of China’s national ETS in three phases: starting with building the infrastructural pillars of the system (registry, trading platform and MRV), followed by a trial trading phase and finally introducing spot trading and scaling up in sector coverage and trading products. Furthermore, the initial coverage of the power sector goes hand in hand with power market reform in China, demonstrating the embeddedness of the system in broader policy mixes and developments.
Thanks to the successful participation in the Clean Development Mechanism (CDM), China is already familiar with the mechanisms of the carbon market. Furthermore, the eight pilot ETS offer a vast pool of experiences and lessons learnt to be considered in the establishment of the national ETS.