"China ETS Establishment: Based on Global Experiences"

Une conférence internationale co-organisée, dans le cadre du projet Learning Platform [en savoir plus], par l'Iddri et le State Information Center (SIC) of China.




Compte rendu de la conférence [en anglais] :

In the framework of its Leaning Platform on Climate Public Policies, IDDRI co-organized with the State Information Center (SIC) of China an international conference to support Chinese government in its move to establish domestic Emissions Trading Systems (ETS).

In its 12th Five Year Plan (FYP) covering the 2011 to 2015 period, China has recently planned to make further use of market-based instruments to cope with climate. More especially new domestic carbon markets are at stake and China is keen to learn from European experts in this field. Indeed, ETS are often considered as one of the least cost GHG abatement options. Six pilot ETS are supposed to be established by 2013 with increasing demands from local provinces and cities and there have already been several announcements for the launch of a nation-wide ETS by 2015. The event was thus welcomed with great attention by officials in charge of the ETS preliminary studies and market design in China.

The conference covered lessons learnt from ETS experiences world-wide, in particular from the European carbon market (EU ETS). Policy options in the Chinese case were also discussed, factoring in local conditions that would have an impact on the functioning of the schemes, and in particular the national economic environment: high economic growth rate, very industrialized economy, institutional specificities, etc. Chinese experts have already demonstrated a high level of expertise during the event, and actively participated to build knowledge from the conference.

Main findings of the conference are:

- Recognize that there is a long road to go to establish a nation-wide scheme;
- Identify a reasonable ETS coverage, selecting carbon price-sensitive sectors but avoiding to include too vulnerable sectors; account for the fact that pass-through of costs is not possible for every sectors (especially power generation);
- Gain stakeholders’ support in the negotiation phase, make concessions without compromising the future working of the scheme;
- Reinforce capacity in MRV at both the national and provincial levels, in particular increase the number of qualified staff and the quality of procedures;
- Start with a simple but adaptive market design, with a rather low but increasing resulting carbon price; and improve design (e.g. more efficient allocation mode) in a second phase, and progressively build trust and confidence in the new market mechanism;
- Pay attention to the consistency of the energy ad climate policy package, avoiding overlaps and gaps and complementing existing policies if needed;
- Put the carbon-markets in a wider low-carbon development strategy.

This first conference on carbon markets implementation in China called for further cooperation in the framework of IDDRI’s Learning Platform. China's Climate Change Minister himself, Xie Zhenua, recently said in Inhotim (Brazil): "We want to deepen the dialogue with developed nations so that a joint effort for the Durban conference will yield satisfactory results and equality for all parties". IDDRI will continue to foster exchanges with Chinese officials and experts on the ETS issue by the end of 2011, in line with the China political agenda. Further planned events are:

- Organize other seminars and meetings with central government but also provincial officials in charge of the market design on their territory; facilitate technical assistance from European experts (registries, MRV, hardware and software, etc.);
- Assess further co-benefits of ETS and replace them in more larger vision of the national economy and its social development, especially in a low-carbon perspective for a harmonised society; emphasize political benefits both nationally and for the international cooperation.