China

Country Context & Primary Activities for PMR Support

Policy context

China’s climate change strategy is integrated into its social and economic development planning. Action on climate change mitigation will be an important catalyst for the restructuring of key aspects of the Chinese economy, including the power sector. China pledges to reduce its carbon dioxide emissions per unit of GDP by 40–45% by 2020, compared with 2005 levels, and increase non-fossil-based primary energy consumption to 15% by 2020.

Piloting Emissions Trading

China is exploring and piloting domestic ETS to achieve its mitigation target cost effectively. These pilots cover 5 cities and 2 provinces, accounting for 18% of China’s population and 28% of its national GDP. Several pilots will become operational in 2013.

The PMR will support...

• Designing and preparing for a national ETS, including work on cap setting, allocation, MRV, mechanisms for price containment, market oversight and a legal framework;
• Specific analytical work will be carried out on the inclusion of SOEs and the power sector; and
• A national ETS, which is targeted to launch between 2016 and 2020.

Source: PMR Market Readiness Proposal submitted by the Chinese National Development and Reform Commission, February 2013