Optimizing the rolling out plan of China’s carbon market
Ke Wang,
Zhixin Wang,
Yujiao Xian,
Xunpeng Shi,
Jian Yu,
Kuishuang Feng,
Klaus Hubacek,
Yi-Ming Wei
Affiliations
Ke Wang
Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing, China; School of Management and Economics, Beijing Institute of Technology, Beijing, China; Sustainable Development Research Institute for Economy and Society of Beijing, Beijing, China; Beijing Key Lab of Energy Economics and Environmental Management, Beijing, China; Corresponding author
Zhixin Wang
School of Management and Economics, Beijing Institute of Technology, Beijing, China
Yujiao Xian
School of Management, China University of Mining and Technology (Beijing), Beijing, China; Corresponding author
Xunpeng Shi
Australia-China Relations Institute, University of Technology Sydney, Ultimo, NSW, Australia; Corresponding author
Jian Yu
School of Economics, Central University of Finance and Economics, Beijing, China
Kuishuang Feng
Department of Geographical Sciences, University of Maryland, College Park, MD, USA
Klaus Hubacek
Integrated Research on Energy, Environment and Society (IREES), Energy and Sustainability Research Institute Groningen, University of Groningen, Groningen, the Netherlands
Yi-Ming Wei
Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing, China; School of Management and Economics, Beijing Institute of Technology, Beijing, China; Sustainable Development Research Institute for Economy and Society of Beijing, Beijing, China; Beijing Key Lab of Energy Economics and Environmental Management, Beijing, China
Summary: Although China has developed the world’s largest carbon emissions trading scheme (ETS), there is no official documentation explaining how the current sectoral coverage plan was determined and what sectoral rollout plan is preferred. Here, we contribute to the policy development of the world’s largest carbon market by suggesting a priority list of industries be covered in the ETS. We estimated marginal abatement cost curves using a database of more than two million firms covering over 500 four-digit industries that account for more than 97% of total industrial emissions, and simulating various carbon market scenarios including thermal power, 13 designated, and an additional 50 industries that have high emissions or are covered in other ETSs. Our analysis suggests that the cement industry should be the next sector to be included in China’s ETS. In our revised list, the average abatement cost can be reduced by 39.5–78.3% compared with the business-as-usual scenario.
