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Harvard Project Conducts Research Workshop on China's National Emissions Trading System

| Jan. 04, 2022

The Harvard Project on Climate Agreements conducted a joint research workshop on October 20, 2021 titled “ETS and the power sector in China and other Asian countries: interactions, design, and operation.” The Center for Energy Economics and Strategy Studies at Fudan University, directed by Professor Wu Libo, and the Asia Society Policy Institute (ASPI), whose Asia-Pacific Sustainability Program is directed by Alistair Ritchie, co-organized the workshop, which was conducted virtually over Zoom. The Harvard Global Institute provided partial support for the project.

Links to the agenda, participant list, most workshop presentations, and a summary of the discussions at the workshop are at the bottom of this page.

China’s national emissions trading system (ETS) started operation this year, covering over 2,200 entities in the power sector and immediately becoming the world’s largest ETS. The power sector is one of the most important to cover in any ETS, due to the scale and abatement potential of GHG emissions in that sector. However, there are some critical challenges to overcome before an ETS can fulfil its emission-reduction potential by driving fuel switching away from coal and towards renewables and low-carbon fuels. This meeting addressed some of these challenges and provided comparisons with other Asian countries. For further details, see the agenda, linked below.

Approximately fifty experts participated, based in China, Germany, Indonesia, the Republic of Korea, Malaysia, Taiwan, Thailand, the Philippines, the United States, and Vietnam. Chinese participants included researchers and analysts from Fudan University in Shanghai, Tsinghua University in Beijing, the China Electricity Council, and the Development Research Center of the State Council.

On the first day of the workshop, Professor Wu Libo made a presentation on how China’s national ETS might more effectively support fuel switching in the power sector, from coal to low-carbon fuels. Her presentation is linked below. Professor Valerie Karplus, of Carnegie Mellon University, later moderated a discussion of related topics, including how carbon costs can be passed through to electricity prices and be reflected in power station dispatch. Several speakers then provided comparative context from Korea, Indonesia, Japan, and Thailand. Finally, Ms. Zhang Jingjie, of the China Electricity Council, examined how an ETS can work effectively with other policies targeting power-sector GHG reductions.

On the second day of the workshop, Professor Stavins interviewed Professor Zhang Xiliang of Tsinghua University, focusing on the motivations for design choices for China’s ETS — and how the design may evolve over time. Daniel Ziegler of Uniper provided comparative context, with a private sector perspective, from Germany and the European Union. Alistair Ritchie, of ASPI, moderated the session, including a closing discussion on next steps.

The organizers are grateful to the Harvard Global Institute for support of the initiative of which this workshop is a part.

The workshop on China’s national ETS, in comparative context, is the seventh in a series conducted by the Harvard Project on Climate Agreements, addressing market mechanisms and other aspects of climate-change policy in China:

  • June 2021: “Prospects for Guangdong Province’s Emissions Trading System.” Conducted online and co-organized with the Research Center for Climate Change at Guangdong University of Technology — directed by Professor Zeng Xuelan. Supported by Energy Foundation — China. Read more about the workshop here.
  • October 2020: “China’s national carbon-pricing system: Challenges and opportunities.” Conducted online and co-organized with Tsinghua University’s Institute of Energy, Environment, and Economy — directed by Professor Zhang Xiliang. Supported by the Harvard Global Institute. Read more about this workshop here.
  • July 2019: “Subnational Climate Change Policy in China.” Hosted and co-organized by Tsinghua University’s Institute of Energy, Environment, and Economy. Supported by the Harvard Global Institute. Read more about this workshop here. Read the volume of briefs based on the workshop here.
  • September 2017: “Cooperation in East Asia to address climate change.” Hosted by Harvard Center Shanghai and supported by the Harvard Global Institute. Read more about this workshop here. Read the volume of briefs based on the workshop here.
  • December 2016: “The design, implementation, and operation of China’s national emissions trading system”; host: National Center for Climate Change Strategy and International Cooperation. Supported by the China Emissions Exchange (Shenzhen) and the Program on China and Globalization, Ash Center for Democratic Governance and Innovation, Harvard Kennedy School. The approximately twenty participants explored technical issues related to the design of China’s emerging national system, including allowance allocation, point of regulation, and price management.
  • June 2015: “Bilateral Cooperation between China and the United States: Facilitating Progress on Climate-Change Policy.” Hosted by the National Center for Climate Change Strategy and International Cooperation. The workshop was supported by the Hui Fund for Generating Powerful Ideas, in the Ash Center for Democratic Governance and Innovation at Harvard Kennedy School. Read more about this workshop here. Read the workshop report here.

Following are links to materials from the Harvard Project’s October 2021 workshop, “ETS and the power sector in China and other Asian countries: interactions, design, and operation”:

For more information on this publication: Please contact Harvard Project on Climate Agreements
For Academic Citation: Stowe, Robert. “Harvard Project Conducts Research Workshop on China's National Emissions Trading System.” News, Harvard Project on Climate Agreements, January 4, 2022.

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