Assessing the Design of Three Pilot Programs for Carbon Trading in China

Clayton Munnings (), Richard Morgenstern (), Zhongmin Wang () and Xu Liu
Additional contact information
Clayton Munnings: Resources for the Future
Richard Morgenstern: Resources for the Future
Zhongmin Wang: Resources for the Future

RFF Working Paper Series from Resources for the Future

Abstract: China started seven carbon cap-and-trade pilot programs in order to inform the development of a future national cap-and-trade market. This paper assesses the design of three of the longer-running cap-and-trade pilot programs in Guangdong, Shanghai and Shenzhen. Based on extensive stakeholder interviews and a detailed literature review we formulate a series of recommendations to improve the design of these three pilots, including: strengthening the legal foundations for the cap-and-trade pilots, incorporating achievement of goals established by the cap-and-trade pilots into the performance reviews of participating government officials and executives of state-owned entities, further clarifying the cap-setting process, increasing the transparency of the cap, reducing or eliminating within-compliance period adjustments to enterprise-level allowance allocation, gradually moving away from free allocation toward auctioning, reforming enforcement policy, and adopting a symmetric safety valve to manage prices. By making these recommendations, we hope to shed light on ways that Chinese regulators might adapt cap and trade, a fundamentally market-based tool, to China's economy that has many non-market features.

Keywords: emissions trading; carbon; China (search for similar items in EconPapers)
JEL-codes: Q48 Q54 Q58 (search for similar items in EconPapers)
Date: 2014-10-16
New Economics Papers: this item is included in nep-cna, nep-ene, nep-env, nep-reg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.rff.org/RFF/documents/RFF-DP-14-36.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.rff.org/RFF/documents/RFF-DP-14-36.pdf [301 Moved Permanently]--> https://www.rff.org/RFF/documents/RFF-DP-14-36.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rff:dpaper:dp-14-36

Access Statistics for this paper

More papers in RFF Working Paper Series from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by Resources for the Future ().