China’s Carbon Emissions Trading Market: Current Situation, Impact Assessment, Challenges, and Suggestions

Qidi Wang, Jinyan Zhan (), Hailin Zhang, Yuhan Cao, Zheng Yang, Quanlong Wu and Ali Raza Otho
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Qidi Wang: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China
Jinyan Zhan: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China
Hailin Zhang: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China
Yuhan Cao: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China
Zheng Yang: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China
Quanlong Wu: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China
Ali Raza Otho: State Key Laboratory of Wetland Conservation and Restoration, School of Environment, Beijing Normal University, Beijing 100875, China

Land, 2025, vol. 14, issue 8, 1-27

Abstract: As the world’s largest developing and carbon-emitting country, China is accelerating its greenhouse gas (GHG) emission reduction process, and it is of vital importance in achieving the goals set out in the Paris Agreement. This paper examines the historical development and current operation of China’s carbon emissions trading market (CETM). The current progress of research on the implementation of carbon emissions trading policy (CETP) is described in four dimensions: environment, economy, innovation, and society. The results show that CETP generates clear environmental and social benefits but exhibits mixed economic and innovation effects. Furthermore, this paper analyses the challenges of China’s carbon market, including the green paradox, the low carbon price, the imperfections in cap setting and allocation of allowances, the small scope of coverage, and the weakness of the legal supervision system. Ultimately, this paper proposes recommendations for fostering China’s CETM with the anticipation of offering a comprehensive outlook for future research.

Keywords: carbon emissions trading policy; system structure of the carbon market; compliance carbon market; voluntary carbon market; carbon price; allowance allocation (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2025
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