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MMUNITY NEWS
Delivering on
Decarbonization?
Evaluating China’s New
Emissions Trading System
By the Stanford Center on China’s Economy and Institutions (SCCEI)
China, the world's largest emitter of China’s power sector and was launched in
greenhouse gases, has pledged to have its July 2021. Employing a unique dataset of
CO2 emissions peak no later than 2030 and cost, revenue, and emissions from most of the
to achieve net-zero carbon emissions by 2060. power plants supplying China’s electrical grid,
To reach these goals, China is implementing researchers constructed two models to compare
what will be the world's largest CO2 emissions the TPS to C&T and predict the costs and impacts
trading system. China’s approach, called a of the TPS system under various conditions.
tradable performance standard (TPS), differs
from the more conventional cap and trade (C&T) The TPS is more reliant on reduced
systems used in the U.S. and Europe. How does emissions intensities. Both the TPS and C&T
China’s TPS system function? How are the costs include provisions for allowance trading, which
distributed across industries and consumers, helps reduce the system-wide costs of achieving
and what scope of emissions reductions will the economy-wide reductions in emissions. But there
system bring about? are important structural differences between
the systems. For the covered facilities, the TPS
The data. This research focuses on the TPS’s establishes ceilings on emissions intensity
impact in its first phase, which only covers (the ratio of a plant’s CO2 emissions per unit
29 AMCHAM SOUTH CHINA
Delivering on
Decarbonization?
Evaluating China’s New
Emissions Trading System
By the Stanford Center on China’s Economy and Institutions (SCCEI)
China, the world's largest emitter of China’s power sector and was launched in
greenhouse gases, has pledged to have its July 2021. Employing a unique dataset of
CO2 emissions peak no later than 2030 and cost, revenue, and emissions from most of the
to achieve net-zero carbon emissions by 2060. power plants supplying China’s electrical grid,
To reach these goals, China is implementing researchers constructed two models to compare
what will be the world's largest CO2 emissions the TPS to C&T and predict the costs and impacts
trading system. China’s approach, called a of the TPS system under various conditions.
tradable performance standard (TPS), differs
from the more conventional cap and trade (C&T) The TPS is more reliant on reduced
systems used in the U.S. and Europe. How does emissions intensities. Both the TPS and C&T
China’s TPS system function? How are the costs include provisions for allowance trading, which
distributed across industries and consumers, helps reduce the system-wide costs of achieving
and what scope of emissions reductions will the economy-wide reductions in emissions. But there
system bring about? are important structural differences between
the systems. For the covered facilities, the TPS
The data. This research focuses on the TPS’s establishes ceilings on emissions intensity
impact in its first phase, which only covers (the ratio of a plant’s CO2 emissions per unit
29 AMCHAM SOUTH CHINA
