DUAN Maosheng China Carbon Market Center (CCMC), Tsinghua University China’s National Emissions Trading System: Features, Progress and Prospects DUAN Maosheng China Carbon Market Center (CCMC), Tsinghua University

1. Key Features of China’s National System Unified rules for all regions for make a unified system Flexibilities to extend coverage and reduce free allowances given to the provincial authorities to address regional disparities Benchmarking approach the first choice for allocation Real production-based allocation and regulation of indirect emissions to coordinate with other policies Ex-post cap determined by bottom-up approach to adapt to the intensity-based national mitigation target at the initial stage Shared responsibilities between authorities at the national and provincial levels Comprehensive compliance rules

2. Progress Publication of the Development Plan of the National Carbon Emissions Trading System (Power Generation Sector) on 19 December 2017 Reporting and verification of historical emissions of enterprises in the 8 sectors as of 2013 Development of the registry, reporting and transaction systems Further test/assessment of the proposed allocation approaches Continued efforts on legislation, capacity building ……

3. Challenges Competition/coordination with other policies such as “double control” of both energy consumption amount and intensity, trading of right to use energy, power sector reform, renewable energy development policy, air pollution control policies, etc. Coordination with other mitigation policies such as regional GDP carbon intensity reduction target Co-existence of the national and regional systems, including possible transition for some sectors Coordination efforts in system design and regional practice Government reform undergoing Vested interests and quickly missing coordination opportunities

Thanks duanmsh@tsinghua.edu.cn