China’s Development of ETS as a GHG Mitigating Policy Tool: A Case of Policy Diffusion or Domestic Drivers?

Abstract

China launched its national emissions trading scheme (ETS) in late 2017. This article examines the key drivers behind China's 2011 decision to opt for ETS as a GHG mitigating policy tool and what lay behind the choice of the system's design features. Given the existence of the frontrunner EU ETS and that market mechanisms have spread across the world in recent years, we analyze the role played by policy diffusion in the decision to launch an ETS and in the subsequent design process, seen in relation to domestic drivers. The article investigates policy developments culminating in the 2011 carbon market announcement, and the reasons these design elements were chosen for the pilot schemes and the national market in the period 2011-2017. The article contributes to our understanding of policy diffusion at different stages of policy development in China, by revealing which diffusion mechanism is more prevalent at different stages. We find first that overall domestic conditions and drivers had the most consistent impact on policy decisions to establish a carbon market and on the selected sectors. However, a second key finding is that the role of policy diffusion varied over time, with such diffusion, in the form of ideational impact, playing the most important role early on, providing a powerful inducement for China to go for a carbon market. Third, sophisticated learning from international projects took place in the pilots, allowing China to adapt policies and design features to match local conditions.

Mapping and clustering the adoption of carbon pricing policies: what polities price carbon and why?

“…Studies of carbon pricing have historically focused on economic aspects, and in the cases in which they focus on the adoption of carbon pricing, mainly on single cases at the national, provincial or European Union level (Harrison, 2012;Heggelund, Stensdal, Duan, & Wettestad, 2019;Wettestad, 2014). Yet, a small but increasing number of publications study polities adopting emissions trading through comparative case studies (Houle, Lachapelle, & Purdon, 2015; the contributions to Biedenkopf, Müller, Slominski, & Wettestad, 2017;and Wettestad & Gulbrandsen, 2018) or large-N studies (Betsill & Hoffmann, 2011;Narassimhan, Gallagher, Koester, & Alejo, 2018).…”

China’s climate and energy policy: at a turning point?

“…In terms of supply–push policies, China has become the world leader in technology investment and installed capacity in wind and solar power, as well as in introducing electrical cars (Korsnes 2020 ). As to demand–pull policies, a carbon-pricing approach is being developed through the emerging emissions trading scheme (ETS) regime (Heggelund et al 2019 ). Further, considerable progress has been made in energy efficiency; and measures for countering air pollution have been important also for curbing CO 2 emissions.…”

“…However, the command-and-control approaches traditionally applied in this period came under scrutiny due to shortcomings in attaining objectives. This led to a radical re-alignment at the start of the 12th FYP when low-carbon, green, sustainable development as well as market approaches were introduced (Heggelund et al 2019 ). Yet, preferential policies to the coal sector continued, pushed by the state-owned enterprises and supported by local governments due to local economic interests (CREO 2018 ).…”

Policy Diffusion in a Redistributive Policy: Affordable Housing and State Housing Trust Funds

“…Recent work includes policy areas such as energy policy (Nicholson-Crotty and Carley 2018), health policies (Pacheco 2017), marijuana legalization (Johns 2015;Hannah and Mallinson 2018), public budgeting (Krenjova and Raudla 2017), policy networks (Yi, Berry, and Chen 2018), same-sex marriage (Fay 2018), and antismoking restrictions (Shipan and Volden 2014). There is also emerging research looking at the diffusion mechanism outside of the U.S. context to expand the external validity of the theory across countries (Beer and Cruz-Aceves 2018;Heggelund et al 2019). In addition to the vast field of policies studied over the decades, the literature has expanded to studying numerous policy areas at once, to create more generalizable findings on diffusion dynamics (Boehmke and Skinner 2012).…”

“…Recent contributions have included policy areas such as energy policy (Nicholson-Crotty and Carley 2018), tobacco policy (Pacheco 2017), medical marijuana laws (Johns 2015;Hannah and Mallinson 2018), and same-sex marriage (Fay 2018). Theories of policy diffusion also have been applied to different national contexts, including China, Germany, Latin American countries, and the United States (Meseguer 2004;Shipan and Volden 2014;Abel 2019;Heggelund et al 2019). We continue in this line of policy diffusion research in the context of U.S. states with application to housing affordability.…”