China Policy Journal Volume 1, Number 1, Fall 2018 | Page 34

Assessing the Implementation of Local Emission Trading Schemes in China
(1) BJ: covering power generation sector, cement, heat supply, petrochemical,
car manufacturing, and etc.; public buildings, aviation, large
restaurants, hotels and banks
(2) SH: covering power generation sector, steel, non-ferrous, paper,
rubber, chemicals, petrochemical, textile and etc.; airlines, ports, airports,
large commercial shops and hotels
Cap coverage
Scale
Setting enterprise-level
targets
Enforcing compliance
(3) SZ: covering 26 industrial sectors as well as power generation sector,
gas and water supply; 197 public use buildings; participation open to
any financial institution.
(4) TJ: covering power generation sector, steel & iron, petrochemical,
chemicals, civil construction, heat supply, oil and gas mining
(5) CQ: covering power generation sector, steel & iron, cement, metal
alloy, calcium carbide, caustic soda, electro-plated aluminum
(6) HB: covering power generation sector, steel, cement, non-ferrous,
paper, chemicals, automobile manufacturing, glass and etc.
(7) GD: covering power generation sector, steel, cement, non-ferrous,
paper, ceramics, petrochemical, plastics and etc.
Share of the cap coverage in the total emissions in the city/province:
(1) BJ-40%; (2) SH-57%; (3) SZ-38%; (4) TJ-60%; (5) CQ-40%; (6) GD-
55%; (7) HB-35%
Intensity-based emission caps are assigned to participating enterprises
through either free allocation or auctioning, and the enterprises can
buy more emission allowance from the ETS market:
(1) Free allocation through grandfathering approach is the prevalent
allocation method across pilots;
(2) Auctioning has been used as a complementary allocation method in
GD, SH and SZ to allocate a small portion of allowances.
(1) Except CQ and TJ, every ETS pilot has monetary penalties for
non-compliance.
(2) Additionally, SZ, HB and GD have a further penalty, which is
deducting the excess emissions from the following complinace period's
emission allowance.
Note: Swartz (2013), Perdan and Azapagic (2011), and relevant Chinese policy documents. “BJ”
is short for Beijing, “SH” for Shanghai, “SZ” for Shenzhen, “TJ” for Tianjin, “CQ” for Chongqing,
“GD” for Guangdong.
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