China's Carbon Emission Trading Mechanism: Realistic Challenges and Practical Pathways

Abstract

Carbon emissions trading serves as a pivotal mechanism for carbon reduction and significantly contributes to the realization of China's dual-carbon objectives. China will implement a nationwide carbon trading market from 2021, but it is still in the early stage of development, and there are still a lot of imperfections. Through an analysis of the current status of the development of China's carbon emissions trading mechanism, this study identifies several challenges within the domestic carbon emissions trading market mechanism, including the "overly singular allocation of quotas, lack of market activity, and difficulties in supervision and verification." In order to overcome these obstacles, this paper proposes a series of recommendations, including gradually increasing the proportion of paid auction quotas, accelerating the expansion of carbon market participants, and applying digital technologies for carbon emissions monitoring and data collection. This paper then put forward suggestions such as gradually expanding the proportion of allowances to be used in the auction, accelerating the expansion of carbon market participants, and applying digital technology to the monitoring of carbon emissions and data collection, with a view to providing certain theoretical support for the future optimisation and research of China's carbon emissions trading market.