China Policy Journal Volume 1, Number 1, Fall 2018 | Page 54

Assessing the Implementation of Local Emission Trading Schemes in China
is more complete. However, the power
generation sector has faced with many
other policies, such as renewable energy
promotion policies. The coordination
of the policy mix is important.
The integration of the local ETSs
into the national ETS will be challenging
too. For instance, the sectoral coverage
of the national ETS is different from
the current local ETSs. NDRC’s solution
is that the national ETS will regulate the
power generation sector and gradually
take in other sectors. Meanwhile, the
local ETSs will continue to operate until
the national ETS is fully functional.
However, the standards for identifying
the potential participants are different
between the national level and the local
level. For example, Shenzhen includes
industrial enterprises that have annual
emissions larger than 3000 tons CO 2
e,
but the standard set at the national level
is 26000 tons CO 2
e annually, which
means that some enterprises regulated
by Shenzhen ETS may not be regulated
by the national ETS. These regulatory
uncertainties will discourage the
current participants in local ETS from
actively engaging in the market or taking
low-carbon actions. The standards
at the national level should be stricter
than those of the local ETSs and consistent
political support is crucial (Bolun
et al. 2018). The central government
should offer guidelines and methodologies
on design and operations of ETS
regarding coverage and scope, MRV,
allowance allocation and enforcement,
while the local governments should be
given discretion with implementation
taking into account local contingencies
(Bolun et al. 2018).
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