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Carbon trading in a socialist market economy: Can China make a difference?
Ecological Economics 87 (2013) 72–74
Contents lists available at SciVerse ScienceDirect
Ecological Economics journal homepage: www.elsevier.com/locate/ecolecon
News and Views
Carbon trading in a socialist market economy: Can China make a difference? Alex Y. Lo ⁎ Griffith School of Environment, Griffith University, Gold Coast, QLD 4222, Australia
a r t i c l e
i n f o
Article history: Received 22 September 2012 Received in revised form 11 December 2012 Accepted 19 December 2012 Available online 22 January 2013
a b s t r a c t A global carbon trading system has gained shape since several major Asia-Pacific economies declared their participation. As the largest national source of greenhouse gases, China is probably the most prominent newcomer. Pilot emission trading schemes are being introduced in this country with prospects for developing into a national scheme. The initiative is primarily motivated by expected economic benefits rather than environmental commitments. Viability is uncertain due to the absence of a liberal political–economic system as we know in the western world. The theory of carbon trading is being tested in an unusual place, with huge implications, both practically and theoretically.
1. Introduction Carbon trading entered an uncertain period in 2009 when the world economy slumped and international climate change negotiations encountered major hurdles (Perdan and Azapagic, 2011). When the world economy began to recover from the financial turmoil, an untypical market advocate casts a vote of confidence for the contested concept of carbon trading. China's national agenda have now included a carbon emission trading scheme (ETS). In the late 2011, the Chinese government appointed seven pilot sites across the country, including two provinces (Guangdong and Hubei) and five cities (Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen). Collectively they account for 27.4% of its national GDP and 18.4% of its population. The short-term goal is to establish trans-provincial and trans-regional ETSs in transition to a national scheme by 2015. The pilot schemes are due to operate in 2013. China is the largest national source of greenhouse gases (GHGs), currently producing 19.1% of the world's total GHG emissions, or 5.5 t CO2 equivalent per person (Flannery et al., 2012). Within the country there is strong resistance to assuming mandatory commitments to reducing national GHG emissions in absolute terms. It has committed itself to an ambitious carbon intensity target, 1 i.e. 40–45% below 2005 levels by 2020. During 2000 and 2009, however, when China's carbon intensity fell by 8.2%, its national CO2 emissions more than doubled (125%) (International Energy Agency, 2011, p. 95 and 47, respectively). The commitment does not prevent total amount of CO2 emissions from increasing. Optimists may find the Chinese ETS a rare opportunity. Potentially, it can be linked to other ETSs operating in the region, including Australia, New Zealand, South Korea, and Japan (Tokyo), eventually creating an Asia-Pacific network of carbon trading. It is therefore expected to mark ⁎ Tel.: +61 7 55527419; fax: +61 7 55528244. E-mail address: alex.lo@griffith.edu.au. 1 Carbon intensity refers to the level of CO2 emissions per unit GDP.
http://dx.doi.org/10.1016/j.ecolecon.2012.12.023
a major progressive move towards an internationally linked carbon market. However, all of the existing mandatory carbon ETSs operate in mature market economies safeguarded by a liberal democratic regime. China, in contrast, is a developing market economy with a socialist political tradition—as it has called itself a ‘socialist market economy’. The Chinese ETS is therefore characterized by the distinctive political– economic context in which it will operate (Han et al., 2012; Yu and Elsworth, 2012). In this paper I attempt to point out two key features of the political economy of carbon trading in China. 2. Economic Discourse of Climate Change China's climate change policy discourse is situated in the context of energy security and conservation, and couched primarily in macroeconomic terms (Lo, 2010a, 2010b; Qi et al., 2007; Richerzhagen and Scholz, 2008). It is seen by the political regime as important because of the potential economic and social consequences of unmitigated climate change, such as adverse impacts on food security, threats to regional economic growth, and forced migration and the resulting social conflicts (Lewis, 2009). The country launched the National Climate Change Program and released a white paper on its climate change policy responses in 2007 and 2008 respectively (National Development and Reform Commission, 2007; State Council, 2008). These policy initiatives are essentially an energy blueprint, and none of them makes reference to the Ministry of Environmental Protection (MEP), the national environmental agency, or its predecessor (Lo, 2010a). In China, centrally planned policy guidelines are published in a periodic legislative document known as the ‘Five-Year Plan for National Economic and Social Development’ (FYP). Major administrative units and local governments then formulate their own FYPs in line with national directions. The idea of setting up a national carbon market is written into the national 12th FYP covering the period of 2011–2015 (State Council, 2011a). The ETS pilot projects are coordinated by the National Development and Reform Commission (NDRC), China's top economic planning agency, whereas formal involvement of the MEP is
A.Y. Lo / Ecological Economics 87 (2013) 72–74
73
limited. While the authority to set up the ETS is officially assigned to the NDRC, literally nothing about carbon trading is mentioned in the thematic 12th FYP for National Environmental Protection (State Council, 2011b). Carbon trading is thus seen as primarily an economic policy which can deliver some environmental benefits, rather than an environmental policy itself which would have been initiated or coordinated by a peak environmental agency. It is used as a means of incentivising low-carbon economic growth, while reducing carbon emissions at the same time (Yu and Elsworth, 2012). In fact, prospects for short-term economic benefits have contributed to the quantitative growth in voluntary carbon trading facilities in China. Since 2008, there have been over-investments in carbon trading infrastructure at the sub-national levels. More than twenty environment/ carbon exchanges have been set up in various provinces and even counties, and most of them put their focus on the flourishing carbon trading business. But domestic carbon trading activities are fairly limited. These exchanges compete with each other for the already scarce supply of trading opportunities, partly due to the absence of binding nationwide emissions caps. Consequently this leads to the premature closure of some of the sub-provincial exchanges (Xinhua News Agency, 2011). The establishment of these carbon markets does not primarily serve an environmental objective, but provides a platform for organizing public relations and research-and-development activities related to carbon trades (Han et al., 2012). More importantly perhaps, local governments are keen on securing the first batches of investments in carbon trades for their own markets in order to reap massive benefits as an early entrant, in anticipation of major developments at the national level. China has declared its rejection of any mandatory national target for emission reduction until major developed countries take the lead (Hu, 2009). Nor is it prepared to make any climate change commitment that could compromise its national economy. The rhetoric of carbon trading promises efficiency and benefits from carbon finance. As an aggressive developing economy, China has found these potentials compatible with its non-negotiable first priority, i.e. continuing economic development.
namely, the NDRC through the Department of Price. The central government has set a specific price for almost every newly built generation plant since 1985 (Du et al., 2009). There are large variations in the regulated prices between or even within plants. The regulation of wholesale electricity price, based upon some arbitrary criteria, proves to be ineffective (Du et al., 2009). Inevitably then, the carbon price under the prospective ETS would reflect political judgment rather than marginal cost of production. Regulated electricity companies would be prevented from passing the cost to electricity users who are expected to adjust their power consumption in response to price signals. A World Bank report predicts that under a Chinese ETS which covers the power industry, the Department of Price would play a central role in managing the cost of carbon and its fluctuation (Kossoy and Guigon, 2012). The managed carbon price would effectively become a kind of carbon tax in co-existence with a carbon trading regime, in which both prices and emissions quantity are subject to some form of state control. Indeed, according to insiders such as Lin and Yang (2012), the price and quantity instruments are very likely to co-exist in China. Prospects for economic efficiency, however, may then be compromised (Sorrell and Sijm, 2003). China has a record of excessive state intervention into the emissions market. SO2 emission trading has been implemented at the local level since the 1990s, but the regulatory experience has cast doubt to the expectation that the emissions market could operate free from arbitrary political manipulation. Tao and Mah (2009) have found that the SO2 emission trade prices are largely modulated or instructed by the state depending on the discretion of individual government officials. Often, the government dominates the entire transaction process, including negotiation on trading price, trading volume and terms of permit ownership. The legacy of planned economy has created distortions to the ETS (Tao and Mah, 2009). Given the huge economic implications of GHG control, the central and local governments are tempted to exercise the ‘visible hand’ by modulating prices as they do regularly to manage the economy. It is then uncertain as to how the power sector can be brought into the ETS.
3. Excessive State Intervention
4. Implications
Environmental governance in China is characterized by a form of ‘authoritarian environmentalism’ (Gilley, 2012). It relies upon an extended use of regulatory and coercive powers of the central state in achieving environmental outcomes. For instance, the country managed to lower energy intensity by 19.06% from 2006 to 2010 against the set target of 20%. This marginal success was attributed to political intervention, such as electricity rationing (Wu, 2011). A number of provinces were forced to shut down large swathes of industrial capacity as part of the last-ditch efforts to meet the target, resulting in the “black-outs” of some industries and certain cities towards the end of 2010 (Gilley, 2012; Han et al., 2012). The challenge is that the theory of emission trading is situated in the context of liberal market economy. In emission trading, the quantity of emissions is fixed but prices are allowed to fluctuate towards equilibrium. In theory, the existence of a perfectly functioning market is necessary for it to produce efficient outcomes (Lo and Spash, 2012; Newell and Paterson, 2010; Spash, 2007, 2010; Spash and Lo, 2012). In the idealized setting, prices are determined by market dynamic and not controlled by any single party. Yet this economic assumption has lost validity in actual market settings. The European Union ETS has shown that market power does exist and the power industry has proven to be able to and does engage in activities such as mark-up pricing, price discrimination and manipulation (Spash, 2010). The current situation of the energy market in China is far removed from the idealized case. In China, power prices are put under political control, despite recent electricity market reforms. Key commodity prices, including electricity prices, are regulated by a central authority,
Carbon trading in China is likely to make a difference to the global carbon market. Rather than environmental commitments, however, it is motivated by the perceived compatibility with the imperative of economic development and expected economic benefits. Positive environmental outcomes are not impossible if the expected growth in carbon trades offers adequate material incentives for China to introduce a nationwide emissions cap. Seemingly this brings some hope for stabilizing GHG in the atmosphere. The ETS initiative will constitute possibly the biggest test ever for the theory of carbon trading. The prospective national ETS will operate in a fundamentally different political–economic context, in which there is no such liberal market and democratic regime as we know in the western world. Theory predicts that efficient outcomes are unlikely. The success or failure of this initiative is therefore expected to indicate the ways in which different parameters of political economy influence the construction of a huge marketplace and determine its outcomes. By comparing with existing emission trading regimes, the Chinese ETS will allow us to see whether or not a liberal market is necessary for producing environmental benefits.
References Du, L., Mao, J., Shi, J., 2009. Assessing the impact of regulatory reforms on China's electricity generation industry. Energy Policy 37, 712–720. Flannery, T., Beale, R., Hueston, G., 2012. The Critical Decade: International Action on Climate Change. Climate Commission, Commonwealth of Australia, Canberra. Gilley, B., 2012. Authoritarian environmentalism and China's response to climate change. Environmental Politics 21, 287–307.
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A.Y. Lo / Ecological Economics 87 (2013) 72–74
Han, G., Olsson, M., Hallding, K., Lunsford, D., 2012. China's Carbon Emission Trading: An Overview of Current Development. FORSE and Stockholm Environment Institute, Stockholm. Hu, J., 2009. 'Joint hands to address climate change'. Statement by H.E. Hu Jintao, President of the People's Republic of China, at the Opening Plenary Session of the United Nations Summit on the Climate Change, 22 September New York. Available at http://www.fmprc.gov.cn/eng/wjdt/zyjh/t606275.htm. Accessed 17 September 2012.. International Energy Agency, 2011. CO2 Emissions from Fuel Combustion—2011 Highlights. International Energy Agency, Paris. Kossoy, A., Guigon, P., 2012. State and Trends of the Carbon Market 2012. The World Bank, Washington, DC, pp. 94–100. Lewis, J.I., 2009. Climate change and security: examining China's challenges in a warming world. International Affairs 85, 1195–1213. Lin, A., Yang, F., 2012. China's carbon tax is very real, China Dialogue 27 January. Available at http://www.chinadialogue.net/article/show/single/en/4742-China-s-carbon-taxis-very-real Accessed 17 September 2012. Lo, A.Y., 2010a. Active conflict or passive coherence: the political economy of climate change in China. Environmental Politics 19, 1012–1017. Lo, A.Y., 2010b. China's response to climate change. Environmental Science & Technology 44, 5689–5690. Lo, A.Y., Spash, C.L., 2012. How green is your scheme? Greenhouse gas control the Australian way 50, 150–153 http://dx.doi.org/10.1016/j.enpol.2012.07.052. National Development and Reform Commission, 2007. China's National Climate Change Programme. National Development and Reform Commission, the People's Republic of China, Beijing. Newell, P., Paterson, M., 2010. Climate Capitalism: Global Warming and the Transformation of the Global Economy. Cambridge University Press, Cambridge. Perdan, S., Azapagic, A., 2011. Carbon trading: current schemes and future developments. Energy Policy 39, 6040–6054.
Qi, Y., Ma, L., Zhang, L., 2007. Climate change governance in China: a case study. China Population, Resources and Environment 17, 8–12. Richerzhagen, C., Scholz, I., 2008. China's capacities for mitigating climate change. World Development 36, 308–324. Sorrell, S., Sijm, J., 2003. Carbon trading in the policy mix. Oxford Review of Economic Policy 19, 420–437. Spash, C.L., 2007. The economics of climate change impacts à la Stern: novel and nuanced or rhetorically restricted? Ecological Economics 63, 706–713. Spash, C.L., 2010. The brave new world of carbon trading. New Political Economy 15, 169–195. Spash, C.L., Lo, A.Y., 2012. Australia's carbon tax: a sheep in wolf's clothing? The Economic and Labour Relations Review 23, 67–86. State Council, 2008. China's Policies and Actions for Addressing Climate Change. State Council, People's Republic of China, Beijing. State Council, 2011a. The Twelfth Five-Year Plan for National Economic and Social Development (in Chinese). State Council, People's Republic of China, Beijing. State Council, 2011b. The Twelfth Five-Year Plan for National Environmental Protection (No. 42) (in Chinese). State Council, People's Republic of China, Beijing. Tao, J., Mah, D.N.-y., 2009. Between market and state: dilemmas of environmental governance in China's sulphur dioxide emission trading system. Environment and Planning C: Government and Policy 27, 175–188. Wu, Q., 2011. Policy and Politics of a Carbon Market in China, in: Greenhouse gas market report 2011: Asia and Beyond: the Roadmap to Global Carbon & Energy Markets. In: Peetermans, J. (Ed.), International Emissions Trading Association, Genève, Switzerland, pp. 22–25. Xinhua News Agency, 2011. Domestic carbon exchanges blossom and most come at a loss, 28 September. Available at http://news.xinhuanet.com/fortune/2011-09/28/ c_122097917.htm (in Chinese). Accessed 17 September 2012. Yu, G., Elsworth, R., 2012. Turning the tanker: China changing economic imperatives and its tentative look to emissions trading. Sandbag Climate Campaign, London.
Contents lists available at SciVerse ScienceDirect
Ecological Economics journal homepage: www.elsevier.com/locate/ecolecon
News and Views
Carbon trading in a socialist market economy: Can China make a difference? Alex Y. Lo ⁎ Griffith School of Environment, Griffith University, Gold Coast, QLD 4222, Australia
a r t i c l e
i n f o
Article history: Received 22 September 2012 Received in revised form 11 December 2012 Accepted 19 December 2012 Available online 22 January 2013
a b s t r a c t A global carbon trading system has gained shape since several major Asia-Pacific economies declared their participation. As the largest national source of greenhouse gases, China is probably the most prominent newcomer. Pilot emission trading schemes are being introduced in this country with prospects for developing into a national scheme. The initiative is primarily motivated by expected economic benefits rather than environmental commitments. Viability is uncertain due to the absence of a liberal political–economic system as we know in the western world. The theory of carbon trading is being tested in an unusual place, with huge implications, both practically and theoretically.
1. Introduction Carbon trading entered an uncertain period in 2009 when the world economy slumped and international climate change negotiations encountered major hurdles (Perdan and Azapagic, 2011). When the world economy began to recover from the financial turmoil, an untypical market advocate casts a vote of confidence for the contested concept of carbon trading. China's national agenda have now included a carbon emission trading scheme (ETS). In the late 2011, the Chinese government appointed seven pilot sites across the country, including two provinces (Guangdong and Hubei) and five cities (Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen). Collectively they account for 27.4% of its national GDP and 18.4% of its population. The short-term goal is to establish trans-provincial and trans-regional ETSs in transition to a national scheme by 2015. The pilot schemes are due to operate in 2013. China is the largest national source of greenhouse gases (GHGs), currently producing 19.1% of the world's total GHG emissions, or 5.5 t CO2 equivalent per person (Flannery et al., 2012). Within the country there is strong resistance to assuming mandatory commitments to reducing national GHG emissions in absolute terms. It has committed itself to an ambitious carbon intensity target, 1 i.e. 40–45% below 2005 levels by 2020. During 2000 and 2009, however, when China's carbon intensity fell by 8.2%, its national CO2 emissions more than doubled (125%) (International Energy Agency, 2011, p. 95 and 47, respectively). The commitment does not prevent total amount of CO2 emissions from increasing. Optimists may find the Chinese ETS a rare opportunity. Potentially, it can be linked to other ETSs operating in the region, including Australia, New Zealand, South Korea, and Japan (Tokyo), eventually creating an Asia-Pacific network of carbon trading. It is therefore expected to mark ⁎ Tel.: +61 7 55527419; fax: +61 7 55528244. E-mail address: alex.lo@griffith.edu.au. 1 Carbon intensity refers to the level of CO2 emissions per unit GDP.
http://dx.doi.org/10.1016/j.ecolecon.2012.12.023
a major progressive move towards an internationally linked carbon market. However, all of the existing mandatory carbon ETSs operate in mature market economies safeguarded by a liberal democratic regime. China, in contrast, is a developing market economy with a socialist political tradition—as it has called itself a ‘socialist market economy’. The Chinese ETS is therefore characterized by the distinctive political– economic context in which it will operate (Han et al., 2012; Yu and Elsworth, 2012). In this paper I attempt to point out two key features of the political economy of carbon trading in China. 2. Economic Discourse of Climate Change China's climate change policy discourse is situated in the context of energy security and conservation, and couched primarily in macroeconomic terms (Lo, 2010a, 2010b; Qi et al., 2007; Richerzhagen and Scholz, 2008). It is seen by the political regime as important because of the potential economic and social consequences of unmitigated climate change, such as adverse impacts on food security, threats to regional economic growth, and forced migration and the resulting social conflicts (Lewis, 2009). The country launched the National Climate Change Program and released a white paper on its climate change policy responses in 2007 and 2008 respectively (National Development and Reform Commission, 2007; State Council, 2008). These policy initiatives are essentially an energy blueprint, and none of them makes reference to the Ministry of Environmental Protection (MEP), the national environmental agency, or its predecessor (Lo, 2010a). In China, centrally planned policy guidelines are published in a periodic legislative document known as the ‘Five-Year Plan for National Economic and Social Development’ (FYP). Major administrative units and local governments then formulate their own FYPs in line with national directions. The idea of setting up a national carbon market is written into the national 12th FYP covering the period of 2011–2015 (State Council, 2011a). The ETS pilot projects are coordinated by the National Development and Reform Commission (NDRC), China's top economic planning agency, whereas formal involvement of the MEP is
A.Y. Lo / Ecological Economics 87 (2013) 72–74
73
limited. While the authority to set up the ETS is officially assigned to the NDRC, literally nothing about carbon trading is mentioned in the thematic 12th FYP for National Environmental Protection (State Council, 2011b). Carbon trading is thus seen as primarily an economic policy which can deliver some environmental benefits, rather than an environmental policy itself which would have been initiated or coordinated by a peak environmental agency. It is used as a means of incentivising low-carbon economic growth, while reducing carbon emissions at the same time (Yu and Elsworth, 2012). In fact, prospects for short-term economic benefits have contributed to the quantitative growth in voluntary carbon trading facilities in China. Since 2008, there have been over-investments in carbon trading infrastructure at the sub-national levels. More than twenty environment/ carbon exchanges have been set up in various provinces and even counties, and most of them put their focus on the flourishing carbon trading business. But domestic carbon trading activities are fairly limited. These exchanges compete with each other for the already scarce supply of trading opportunities, partly due to the absence of binding nationwide emissions caps. Consequently this leads to the premature closure of some of the sub-provincial exchanges (Xinhua News Agency, 2011). The establishment of these carbon markets does not primarily serve an environmental objective, but provides a platform for organizing public relations and research-and-development activities related to carbon trades (Han et al., 2012). More importantly perhaps, local governments are keen on securing the first batches of investments in carbon trades for their own markets in order to reap massive benefits as an early entrant, in anticipation of major developments at the national level. China has declared its rejection of any mandatory national target for emission reduction until major developed countries take the lead (Hu, 2009). Nor is it prepared to make any climate change commitment that could compromise its national economy. The rhetoric of carbon trading promises efficiency and benefits from carbon finance. As an aggressive developing economy, China has found these potentials compatible with its non-negotiable first priority, i.e. continuing economic development.
namely, the NDRC through the Department of Price. The central government has set a specific price for almost every newly built generation plant since 1985 (Du et al., 2009). There are large variations in the regulated prices between or even within plants. The regulation of wholesale electricity price, based upon some arbitrary criteria, proves to be ineffective (Du et al., 2009). Inevitably then, the carbon price under the prospective ETS would reflect political judgment rather than marginal cost of production. Regulated electricity companies would be prevented from passing the cost to electricity users who are expected to adjust their power consumption in response to price signals. A World Bank report predicts that under a Chinese ETS which covers the power industry, the Department of Price would play a central role in managing the cost of carbon and its fluctuation (Kossoy and Guigon, 2012). The managed carbon price would effectively become a kind of carbon tax in co-existence with a carbon trading regime, in which both prices and emissions quantity are subject to some form of state control. Indeed, according to insiders such as Lin and Yang (2012), the price and quantity instruments are very likely to co-exist in China. Prospects for economic efficiency, however, may then be compromised (Sorrell and Sijm, 2003). China has a record of excessive state intervention into the emissions market. SO2 emission trading has been implemented at the local level since the 1990s, but the regulatory experience has cast doubt to the expectation that the emissions market could operate free from arbitrary political manipulation. Tao and Mah (2009) have found that the SO2 emission trade prices are largely modulated or instructed by the state depending on the discretion of individual government officials. Often, the government dominates the entire transaction process, including negotiation on trading price, trading volume and terms of permit ownership. The legacy of planned economy has created distortions to the ETS (Tao and Mah, 2009). Given the huge economic implications of GHG control, the central and local governments are tempted to exercise the ‘visible hand’ by modulating prices as they do regularly to manage the economy. It is then uncertain as to how the power sector can be brought into the ETS.
3. Excessive State Intervention
4. Implications
Environmental governance in China is characterized by a form of ‘authoritarian environmentalism’ (Gilley, 2012). It relies upon an extended use of regulatory and coercive powers of the central state in achieving environmental outcomes. For instance, the country managed to lower energy intensity by 19.06% from 2006 to 2010 against the set target of 20%. This marginal success was attributed to political intervention, such as electricity rationing (Wu, 2011). A number of provinces were forced to shut down large swathes of industrial capacity as part of the last-ditch efforts to meet the target, resulting in the “black-outs” of some industries and certain cities towards the end of 2010 (Gilley, 2012; Han et al., 2012). The challenge is that the theory of emission trading is situated in the context of liberal market economy. In emission trading, the quantity of emissions is fixed but prices are allowed to fluctuate towards equilibrium. In theory, the existence of a perfectly functioning market is necessary for it to produce efficient outcomes (Lo and Spash, 2012; Newell and Paterson, 2010; Spash, 2007, 2010; Spash and Lo, 2012). In the idealized setting, prices are determined by market dynamic and not controlled by any single party. Yet this economic assumption has lost validity in actual market settings. The European Union ETS has shown that market power does exist and the power industry has proven to be able to and does engage in activities such as mark-up pricing, price discrimination and manipulation (Spash, 2010). The current situation of the energy market in China is far removed from the idealized case. In China, power prices are put under political control, despite recent electricity market reforms. Key commodity prices, including electricity prices, are regulated by a central authority,
Carbon trading in China is likely to make a difference to the global carbon market. Rather than environmental commitments, however, it is motivated by the perceived compatibility with the imperative of economic development and expected economic benefits. Positive environmental outcomes are not impossible if the expected growth in carbon trades offers adequate material incentives for China to introduce a nationwide emissions cap. Seemingly this brings some hope for stabilizing GHG in the atmosphere. The ETS initiative will constitute possibly the biggest test ever for the theory of carbon trading. The prospective national ETS will operate in a fundamentally different political–economic context, in which there is no such liberal market and democratic regime as we know in the western world. Theory predicts that efficient outcomes are unlikely. The success or failure of this initiative is therefore expected to indicate the ways in which different parameters of political economy influence the construction of a huge marketplace and determine its outcomes. By comparing with existing emission trading regimes, the Chinese ETS will allow us to see whether or not a liberal market is necessary for producing environmental benefits.
References Du, L., Mao, J., Shi, J., 2009. Assessing the impact of regulatory reforms on China's electricity generation industry. Energy Policy 37, 712–720. Flannery, T., Beale, R., Hueston, G., 2012. The Critical Decade: International Action on Climate Change. Climate Commission, Commonwealth of Australia, Canberra. Gilley, B., 2012. Authoritarian environmentalism and China's response to climate change. Environmental Politics 21, 287–307.
74
A.Y. Lo / Ecological Economics 87 (2013) 72–74
Han, G., Olsson, M., Hallding, K., Lunsford, D., 2012. China's Carbon Emission Trading: An Overview of Current Development. FORSE and Stockholm Environment Institute, Stockholm. Hu, J., 2009. 'Joint hands to address climate change'. Statement by H.E. Hu Jintao, President of the People's Republic of China, at the Opening Plenary Session of the United Nations Summit on the Climate Change, 22 September New York. Available at http://www.fmprc.gov.cn/eng/wjdt/zyjh/t606275.htm. Accessed 17 September 2012.. International Energy Agency, 2011. CO2 Emissions from Fuel Combustion—2011 Highlights. International Energy Agency, Paris. Kossoy, A., Guigon, P., 2012. State and Trends of the Carbon Market 2012. The World Bank, Washington, DC, pp. 94–100. Lewis, J.I., 2009. Climate change and security: examining China's challenges in a warming world. International Affairs 85, 1195–1213. Lin, A., Yang, F., 2012. China's carbon tax is very real, China Dialogue 27 January. Available at http://www.chinadialogue.net/article/show/single/en/4742-China-s-carbon-taxis-very-real Accessed 17 September 2012. Lo, A.Y., 2010a. Active conflict or passive coherence: the political economy of climate change in China. Environmental Politics 19, 1012–1017. Lo, A.Y., 2010b. China's response to climate change. Environmental Science & Technology 44, 5689–5690. Lo, A.Y., Spash, C.L., 2012. How green is your scheme? Greenhouse gas control the Australian way 50, 150–153 http://dx.doi.org/10.1016/j.enpol.2012.07.052. National Development and Reform Commission, 2007. China's National Climate Change Programme. National Development and Reform Commission, the People's Republic of China, Beijing. Newell, P., Paterson, M., 2010. Climate Capitalism: Global Warming and the Transformation of the Global Economy. Cambridge University Press, Cambridge. Perdan, S., Azapagic, A., 2011. Carbon trading: current schemes and future developments. Energy Policy 39, 6040–6054.
Qi, Y., Ma, L., Zhang, L., 2007. Climate change governance in China: a case study. China Population, Resources and Environment 17, 8–12. Richerzhagen, C., Scholz, I., 2008. China's capacities for mitigating climate change. World Development 36, 308–324. Sorrell, S., Sijm, J., 2003. Carbon trading in the policy mix. Oxford Review of Economic Policy 19, 420–437. Spash, C.L., 2007. The economics of climate change impacts à la Stern: novel and nuanced or rhetorically restricted? Ecological Economics 63, 706–713. Spash, C.L., 2010. The brave new world of carbon trading. New Political Economy 15, 169–195. Spash, C.L., Lo, A.Y., 2012. Australia's carbon tax: a sheep in wolf's clothing? The Economic and Labour Relations Review 23, 67–86. State Council, 2008. China's Policies and Actions for Addressing Climate Change. State Council, People's Republic of China, Beijing. State Council, 2011a. The Twelfth Five-Year Plan for National Economic and Social Development (in Chinese). State Council, People's Republic of China, Beijing. State Council, 2011b. The Twelfth Five-Year Plan for National Environmental Protection (No. 42) (in Chinese). State Council, People's Republic of China, Beijing. Tao, J., Mah, D.N.-y., 2009. Between market and state: dilemmas of environmental governance in China's sulphur dioxide emission trading system. Environment and Planning C: Government and Policy 27, 175–188. Wu, Q., 2011. Policy and Politics of a Carbon Market in China, in: Greenhouse gas market report 2011: Asia and Beyond: the Roadmap to Global Carbon & Energy Markets. In: Peetermans, J. (Ed.), International Emissions Trading Association, Genève, Switzerland, pp. 22–25. Xinhua News Agency, 2011. Domestic carbon exchanges blossom and most come at a loss, 28 September. Available at http://news.xinhuanet.com/fortune/2011-09/28/ c_122097917.htm (in Chinese). Accessed 17 September 2012. Yu, G., Elsworth, R., 2012. Turning the tanker: China changing economic imperatives and its tentative look to emissions trading. Sandbag Climate Campaign, London.