Comparison of Carbon Emission Trading Schemes in the European Union and China

Abstract

Given the growing evidence and scientific consensus on global climate change, carbon emission trading schemes (ETS) have been deemed crucial in mitigating the problem. Therefore, this study compares the mechanisms of ETS in the European Union with those in China. The results indicate similarities in cap determination, the coverage and calculation method of allowance allocation, trading participants and allowance category, offset credit, and MRV. On the other hand, the allocation method and supervision of allowance allocation, allowance formats and trading methods, market risk management, market linkage mechanism, and legislation security evidently appear to vary. However, the results were unable to identify which ETS is absolutely good or bad due to the political, economic, and institutional contexts and the varying developmental phases. Eventually, drawing on these findings, we conclude with implications for the promotion of ETS.