Asia & the Pacific

China recently launched the world’s largest emissions trading market, but it is just one component of the nation’s ambitious efforts to curb the rise in greenhouse-gas emissions. That was the message delivered on Thursday (July 22) by Carnegie Mellon University Associate Professor Valerie Karplus during a Virtual Forum hosted by the Harvard Project on Climate Agreements (HPCA) and moderated by Robert Stavins, HPCA Director and A.J. Meyer Professor of Energy and Economic Development.

Guangdong Province ranks first in economic output among China’s provinces and will play a major role in achieving China’s national climate-change goals. This paper examines the progress of Guangdong Province’s carbon dioxide emissions trading system (ETS) in reducing emissions; design features of the system; challenges it faces with regard to further development; and its relationship to China’s new national ETS.

The Harvard Project conducted a research workshop in June 2021, “Prospects for Guangdong Province’s Emissions Trading System.” Guangdong Province 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.

China’s emissions trading system (ETS) for carbon dioxide (CO₂) will become operational in mid-2021. This paper describes the trading system’s history, design, rules governing implementation, and anticipated developments over the next decade. The ETS is expected to support China’s goals of reaching peak CO₂ emissions by 2030 and of achieving carbon neutrality by 2060.