Market Readiness Programme China
Start & End Date: 2015-2030
Country/Countries: China
Multilateral Institution(s) Involved: World Bank
Carbon markets are a cost-effective way to mitigate emissions of greenhouse gases. PMI is the successor program to the World Bank’s successful Partnership for Market Readiness (PMR) effort that, from 2011 to 2021, supported emerging economies and developing countries to design and deploy carbon pricing and market instruments to facilitate the reduction of emissions. PMR provided funding and technical assistance to 23 countries, accounting for 46% of global greenhouse gas emissions, all of whom now have the basic nuts and bolts for establishing a carbon pricing system. China’s annual GHG emissions in 2008 were estimated as 7,031 million tonnes, while per capita CO2 emissions from fossil fuel combustion in China were 5.13 tons in 2009, equivalent to 52% of the average level in OECD countries. China has pledged to reduce its CO2 emissions per unit of GDP by 40–45% by 2020, compared with 2005 levels and has also pledged to increase non-fossil-based primary energy consumption to 15% by 2020. Thus, action on climate change mitigation will be an important catalyst for the restructuring of key aspects of the Chinese economy, including the power sector.
The China Partnership for Market Readiness Project (CPMR Project) has been implemented by the Government of China (GOC), with the World Bank (WB) as the delivery partner. China is an Implementing Country Participant in the Partnership for Market Readiness (PMR). The CPMR project’s development objective is to enable China to design a national Emissions Trading Scheme (ETS). Partnership for Market Readiness (PMR) has grant 2 million US$ to support China implementing national ETS. Under the supportive of PMR, DCC MEE designed additional activities, i.e. an extended study on sectoral emissions benchmarks for allowance allocation, a study on monitoring and evaluation of construction and maintaining the Registry & Exchange platform as well as linking study between pilot and national ETS, a study on regulatory of National ETS, a study of the interaction between the carbon market and climate financing policies financing policies, a study of national ETS productions developing road map and a study of good practice on carbon trading.
China has adopted emissions trading as one tool to achieve its mitigation target. The Chinese government is piloting emissions trading in five provinces and two cities, accounting for 18% of China’s population and 28% of its national GDP. All seven pilots were launched between 2013 and 2014. They include: Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and Shenzhen. As of March 31, 2017, 2,871 Certified Emission Reduction (CCER) projects have been publicized for comment and 1,047 have been registered (287 of which have been issued) Among those issued, the certification reports for 254 (representing 52.94 million tons of CCERs) are publically available. Wind, small-scale hydro, solar PV and household biogas projects are most popular, due in part to the offset rules for CCERs in the pilot carbon markets. The Communist Party of China (CPC) central committee and the State Council decide to launch the national ETS in 2017. And China's national ETS has been launched on 19 December 2017. CPMR supported the decision and updated the timeline of activities, including inputs to the technical outputs and policy recommendations.