Harvard Project Conducts Research Workshop on Guangdong Province’s CO2 Emissions Trading System

The Harvard Project on Climate Agreements conducted a research workshop on June 16–17, 2021 titled “Prospects for Guangdong Province’s Emissions Trading System.” The Research Center for Climate Change at Guangdong University of Technology — directed by Professor Zeng Xuelan — co-organized the workshop, which was conducted virtually over Zoom. Energy Foundation China provided support for the project.

Links to the agenda and list of participants — as well as most workshop presentations — are at the top of this page.

Guangdong ranks first in economic output among China’s provinces and will play a major role in achieving increasingly ambitious national emissions-reduction targets. Guangdong’s emissions-trading system is, in turn, a key policy instrument in the Province’s climate-action plan.

Twenty-five experts from China, the United States, and Europe participated in the workshop, in addition to Robert Stavins and Robert Stowe, Director and Co-Director of the Harvard Project. Chinese participants included researchers and analysts from Tsinghua University in Beijing, Sun Yat-sen University in Guangzhou (the capital of Guangdong Province), Duke University, the International Energy Agency, and Resources for the Future.

Among the participants were Ms. Meng Meng, Chief Executive Officer of the Guangzhou Emissions Exchange, which manages trading under Guangdong Province’s ETS; Dr. Zou Ji, President of Energy Foundation China and a former professor of environmental economics at Renmin University in Beijing; and Duan Maosheng, Professor and Director of the China Carbon Market Center at Tsinghua University.

Participants prepared two background papers for the workshop:

Zeng Xuelan, Li Weichi, and Guo Xingyue, “The Guangdong Carbon Emissions Trading Scheme: Progress, Challenges and Trends,” June 2021. Chinese and English versions available for download here.

Robert N. Stavins, “Lessons Learned from Sub-National Emissions Trading Systems,” June 2021. Chinese and English versions available for download here.

Valerie J. Karplus, a workshop participant, member of the faculty of the Engineering and Public Policy Program at Carnegie Mellon University’s College of Engineering, and a global expert on energy and climate-change policy in China, prepared a third paper on the status of and prospects for China’s national emissions trading program. While written for another initiative of the Harvard Project on Climate Agreements, it also served as background to the Guangdong workshop. It is available for download, in both English and Chinese, here.

Participants also wrote two technical briefs following the workshop (Chinese and English versions are combined in one document for each brief):

Chen Shaoqing, “Increasing the Emissions-Reduction Efficiency of Carbon Trading Schemes in China Under the “30.60” Target: Reflection on the Carbon Markets of Guangdong Province, China,” March 2022. Available for download here. 

Yang Shu, “The Offsetting Mechanism in Guangdong Province’s ETS: Lessons Learned and the Way Forward,” February 2022. Available for download here. 

On the first day of the workshop. Professor Stavins made a presentation based on his background paper (see above), examining lessons learned from sub-national emissions trading systems in the United States and elsewhere that may usefully inform the ongoing design and operation of Guangdong’s ETS. Professor Zeng then provided a status update on the ETS, based in part on her background paper (written with colleagues). Professor Duan Maosheng, of Tsinghua University, then discussed the important topic of interactions between Guangdong’s ETS and the emerging national emissions trading system.

The second day of the workshop was devoted to specific design features of Guangdong’s ETS. Experts discussed allowance allocation; measurement, reporting, and verification of emissions; relationships among trading, allowance prices, and broader carbon-finance initiatives in the Province; and offsetting mechanisms.

The organizers are grateful to Energy Foundation China for support of the initiative of which this workshop is a part. The Foundation’s vision is to “…achieve prosperity and a safe climate through sustainable energy.”

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

• 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.