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China’s Carbon Emission Trading: An Overview of Current Development

This report, a joint effort by SEI and FORES, examines China’s efforts to develop domestic carbon markets, what is at stake, and key challenges that lie ahead.

Karl Hallding, Guoyi Han, Marie Jürisoo / Published on 23 April 2012

Han, G., M. Olsson, K. Hallding and D. Lunsford (2012). China’s Carbon Emission Trading: An Overview of Current Development. FORES Study 2012:1; Stockholm Environment Institute and Forum for Reforms, Entrepreneurship and Sustainability (FORES), Stockholm.

China has embarked on one of the largest endeavours in climate economics ever, to establish a national carbon emission trading system by 2015. As a first step, carbon-trading pilots have been initiated in seven provinces and cities. The success or failure of those experiments will to a large extent determine the future of climate policies in China.

This report evaluates the progress so far and examines the key challenges ahead. While the attempts to develop a domestic carbon trading are sincere and ambitious, there are considerable difficulties. Many of the challenges are not particular to China, but common to any emission trading system. But there are also more profound worries about how to operate a market-based instrument given the current shortcomings of the Chinese market system in general.

Download the report (PDF, 974kb)

SEI authors

Guoyi Han
Guoyi Han

Senior Research Fellow

SEI Headquarters

Marie Jürisoo
Marie Jürisoo

Deputy Director and Operations Director

Global Operations

SEI Headquarters

Topics and subtopics
Climate : Mitigation

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