Internal Competition and External Diplomacy
Chapter 6: Case study 2: emissions trading
In 2011, the Chinese government decided to pilot emissions trading in seven provinces and municipalities. China widened this to a nation-wide emissions trading system in 2017 – which created the biggest market of this kind in the world. The case study demonstrates specifically the role of the European Union and its member states, as most consistent promoters of emissions trading in China. Developing an emissions trading system (ETS) was one of the core project areas the European Union cooperated on with China, and targeted the building of Chinese capacity in developing regulatory approaches and establishing ETS as a strategy to combat climate change. Other actors, such as the United States and the World Bank influenced the emerging emissions trading system through high-level political dialogue and capacity building. This case study followed the process of policy adoption of ETS regulation, from agenda-setting, through policy analysis, bureaucratic battles between the Ministry of Finance and the National Development and Reform Commission, to adoption as a national strategy and pilot study.
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