Research On Linking Mechanisms For China’s Emissions Trading System

According to the international trends and domestic situations, the dissertation pointed that there were three scenarios in the establishment of the national Emission Trading System. Currently, the first scenario, it is important to be clear about the target regarding linkage of pilot. Most importantly, in the first step the authority should link the existing 7 pilots. To discuss linkages and barriers of linking Emission Trading systems, the dissertation demonstrated distinctions in respect of the legal hierarchy and specific rules in 7 pilots. To conclude that China should take some harmonization and compatibilities into account in the pre-linking term by eliminating barriers among rules and hierarchies.Furthermore, based on the linkage of existing and emerging systems, the dissertation divided patterns of the linkage into two categories, namely the direct linkage and indirect linkage, in which the direct linkage is consisted of unilaterally and bilaterally or multilaterally. After introducing the type of linkages, the dissertation made a conclusion that in the near-term, cap-and-trade systems may apply indirect linkages through unilateral linking among domestic ETS. In the long-term, direct linkages still was the first choice for linkages of cap-and-trade systems. As for China’s choice regarding the type of linkage among 7 pilots, the dissertation considered that it is necessary to take transitional arrangement by adopting indirect linkages for harmonizing operational elements and linking intentions. Over times, China should adopt direct linkages in which the central authority cooperate and design the major elements of the system, and to some extent,7 pilots mutually independent but connected, which in accordance with design of China’s emission trading and political architecture.After determined the intention and type of linkage and analyzing compatibilities of operational elements, linking emission trading systems should need to overcome some serious practical obstacles. Currently, the ETS designs differ in some important aspects that may generate economic and political obstacles to linking. If thinking is to be successful, major design elements of current ETSs will need to be coordinated, including: the level of ambition, allocation methods, rules on banking and borrowing, treatment of offsets, monitoring, reporting, verification and liabilities. Finally, in the light of influence to ETSs linkage, elements mentioned above should be divided in three kinds of types including elements need to be recognized and coordinated, elements that must be agreed and elements without agreements.