California's Cap-and-Trade Programme and Insights for China's Pilot Schemes

TitleCalifornia's Cap-and-Trade Programme and Insights for China's Pilot Schemes
Publication TypeJournal Article
Year of Publication2014
AuthorsBo Shen, Fan Dai, Lynn K Price, Hongyou Lu
JournalEnergy & Environment
Date Published05/2014
KeywordsCap-and-trade, China, China Energy Group, climate change, Energy Analysis and Environmental Impacts Division, greenhouse gas emissions trading, International Energy Department, Policies for Low-Carbon Markets

California's cap-and-trade programme under the Assembly Bill 32 is a key element in California's comprehensive plan for reducing its greenhouse gas (GHG) emissions to 1990 levels by 2020. In China, separate local cap-and-trade pilot schemes are being developed to explore a market-based solution for addressing the country's increasing GHG emissions. The Californian cap-and-trade scheme and China's local pilots are similar in that both have been developed in the absence of a national emissions trading scheme. This paper reviews the Californian scheme and draws insights for China's pilots from various perspectives including the legal basis, institutional arrangement, programme structure, market design, the implementation process, and mechanisms for ensuring compliance.