Can China's policies promote economic growth and environmental protection at the same time? I examine the economy vs. environment dichotomy in Chinese policy-making through the lens of the national carbon market, a market-based policy mechanism that aims to put a price on carbon in China and could soon be the largest carbon market in the world. First, I explore the relationship between post-industrial economic transition and the national carbon market in China. Sustained economic reform still underpins China’s efforts to transition from middle-income to high-income status, and the trajectory of changing economic structure will interact with the carbon market's efforts to decarbonize the economy over time. I simulate the interaction of these two policies in a CGE model to understand their combined effects on economic growth and carbon dioxide emissions. Second, recognizing the shortcomings of computational models, I draw from my fieldwork experiences in China to explore recent delays in the carbon market's implementation. I discuss the conceptual and operational challenges in translating the global concept of a carbon market into the Chinese context, as well as the tremendous opportunities that have arisen in emissions accounting and capacity building. I explore the role of expertise in the policy-making process, and show how China's national carbon market has generated a highly productive policy market even though it has yet to deliver its policy goals.

Cecilia Han Springer is a postdoctoral research fellow with the Belfer Center’s Environment and Natural Resources Program and the Science, Technology, and Public Policy Program. Cecilia studies the economic and environmental impacts of China’s energy policies. At the Belfer Center, her research focuses on the Belt and Road Initiative. Cecilia holds a PhD and MS in Energy and Resources from the University of California, Berkeley, and a BS in environmental science from Brown University.