Emissions Trading and China : Learning by Doing and Implications for Policy Making

Reducing greenhouse gas (GHG) emissions is an ongoing and increasingly urgent policy agenda in China, particularly in light of external pressure from international negotiations and the internal drive to enhance energy efficiency. The legal and policy developments with respect to GHG emissions in China represent the steps and efforts made to date towards improving the policy instruments to reduce emissions more effectively. Market-based instruments, and emissions trading programs in particular, have attracted the interest of the central government in testing the application and efficacy of such measures in the Chinese context, in order to supplement the ineffective command-and-control measures that were largely used during the 11th Five-Year Period (2006-10). This article is structured to outline the context for this development and to contribute to the ongoing development of establishing a national emissions trading scheme in China