United States Emissions Trading - Theory, Practice And Implications For China

Environmental problems have always been endowed with vital bearing on people's livelihood and welfare, particularly in present China, where 3 decades' rocketing development has lead the country to the crossroad of economic transition, and alleviating such problems accumulated has been brought to the limelight. In Premier Wen's REPORT ON THE WORK OF THE GOVERNMENT at the NPC and CPPCC of 2010, strengthening environmental protection has been highlighted as one of the crucial measures as well as objectives of transforming economic growth pattern and optimizing economic structure. Among all the countermeasures against environmental aggravation, prevention must be the most effective, speaking of which, emission trading will definitely play an impressive role in the construction of environmental protection institution, considering its incomparable superiority against traditional channels such as administrative orders or taxation.America is the global leader of emission trading in respect of either theoretical studies or practical implementations. Stressing that the market will return to effectiveness as long as the rights of Capacity Resources are elaborately defined, Ronald H. Coase's property right theory laid the foundation of emission trading. America started from the 1970s to implement the emission trading, and a policy system of basically Offset, Bubble, Banking and Netting was constructed henceforward. The trades have contributed to the success of Acid Rain Program, Ozone Layer Depletion Program, Lead Credit Trading, NOx Regional Ozone Programs and Effluent Trading Program. With the reduction of emissions as required, American enterprises also enjoyed a significant cost decrease. Moreover, extensive social recognition had been established. China had some attempts likewise, namely, sulfur dioxide emission trading experiments in electricity industry, the gap from that of America was, however, quite noticeable. This paper tries to analyze American theory and practice on emission trading in terms of institution arrangement, legislation, and platform and market construction by anatomizing its theoretical basis. More importantly, it discusses the necessity and feasibility of transplanting America's experience in China. Then some suggestions on the composition of China's emission institution are offered the basis of digging to China's realities.