China is the largest greenhouse gas emitter in the world, making its carbon abatement plans crucial to the future of global climate change mitigation. The country’s flagship climate goals aim to peak carbon levels by 2030 and achieve net-zero emissions by 2060 (“30-60 goals”). China has moved more slowly in developing its emissions trading system (ETS) than in other carbon abatement areas. 2021 marked the inception of China’s ETS, the largest carbon emissions market in the world. At the onset, the ETS showed promising returns, with close to $200 million tons of trading in the first transaction period (July-December 2021). However, over the past few years, China has moved slowly to expand the ETS to include more industries. Most recently, the government passed a new series of regulations that will strengthen the legitimacy of the market and authorize more penalties for companies that fabricate or fail to report their emissions.
On April 4, 2024, Michael Davidson joins Max Song and Xiaolu Zhao to discuss China’s emissions trading system and its implications for domestic and international climate goals.
