China has set up pilot Emission Trading Schemes (ETS) in seven cities and provinces over 2013-2014, as a new instrument to incentive emission reduction and to reach its 40-45% carbon intensity reduction target by 2020. Through a two-stage survey including a closed-form questionnaire followed by open interviews, we elicit views of stakeholders in Guangdong province and expectations on pilot carbon markets in China, with an emphasis on stakeholder perspectives of how the pilot emission trading schemes may interact with other existing or perspective low-carbon and clean energy policies. We survey 30 key stakeholders from government, industry and academia and we find that apart from government, other actors generally lack confidence in Chinese carbon markets, due to the shortage of market knowledge and market information, as well as concerns regarding uncertainties in government policy and regulation. Interactions between the carbon market and other low-carbon policies were recognized as a significant obstacle for developing carbon market in China, although, the effect and impact of such interactions was not widely understood.
specifically, past studies indicated that a great majority of Chinese stakeholders would prefer a market base instrument for controlling greenhouse gas emissions. However, the survey generated an inconsistent finding in this context, as only one third the stakeholders felt optimistic about the Chinese carbon market. Surprisingly, the preparation stage of Chinese pilots carbon markets was relatively short compared with Korea, Quebec, California, but very few stakeholders considered the pace was ‘too fast’. That might be explained by that most Chinese stakeholders prioritise ‘speed of deployment’ due to fast economic transition in the last few decades.
Furthermore, the lack of transparency in market information disclosure, a lack of knowledge within market participants, and an immature MRV system could pose uncertainties in carbon price discovery. Stakeholders’ predictions on carbon price reflect a lack of consensus. The respondents realized that the interactions between carbon market and other energy and low-carbon policies may decrease ‘demand’ in emission trading market. However, there is relatively limit understanding on how other mechanisms may affect the price of carbon allowance. Drawing on these findings, we offered relevant policy recommendations.
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