By Haibing Ma

Provinces and municipalities had been competing to establish emissions trading systems (Source: nddaily).

In an article co-authored with my colleague Alexander Ochs in September 2010, we discussed China’s interest in setting up a scheme for carbon-emissions trading in the next five years. Now, the deal is set: The National Development and Reform Commission (NDRC) recently issued an official notice to initiate pilot carbon-trading programs in seven regions. By embracing market-based approaches to mitigating climate change, China is seeking to facilitate a smooth and efficient transition to sustainable development.

The seven pilot regions are the cities of Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen, as well as Guangdong and Hubei provinces. It’s no surprise that some of these regions overlap with China’s “Five Provinces, Eight Cities” pilot program on low-carbon development, initiated in 2010. Although details of the emissions trading programs have not been elaborated, designation of the pilot regions indicates that the central government has finally made up its mind to issue clearer guidance on exploring carbon markets, in order to better coordinate existing municipal and provincial interest in emissions trading.

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12th Five-Year Plan, absolute cap, carbon emission, carbon intensity, carbon tax, China, emission trading, energy intensity, environmental equities, Grand Western Development Program, NDRC, pilot, preferential policies, Special Economic Zone, voluntary