Download European Union Emissions Trading Scheme: Institutional Lessons

European Union Emissions Trading Scheme:
Institutional Lessons for China
Ping CHEN, PhD Researcher
Department of Public International Law
Gent University
Email: [email protected]
Outline
1. Implementation of 2003 ETS Directive:
problems and lessons
2. Revised EU ETS Directive 2009
3. Lessons for the establishment of Chinese
national emissions trading system
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
1. Implementation of 2003 ETS Directive:
problems and lessons (Phase I 2005-2007;
Phase II 2008-2012)
• Problems
 Varieties of Member States policies (caps & allocation approaches)
 The fluctuation of Carbon Price
 Data issue (data of transferring allowances isn’t public)
• Lessons
 Certainty and predictability
 Reasonable flexibility
 Transparency
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
2. Revised EU ETS Directive 2009
Centralization & harmonisation
• Cap-setting
 A single EU-wide cap from 2013 onwards can be calculated on the
basis of the target for 20% GHG emissions reductions by 2020
compared to 1990 level;
• Allocation approach
 Total Auction, no more limitation;
 A differentiated system between the power producing sector and
the power-consuming sector;
• External links to KP flexibility mechanisms
 A limitation on the use of imported credits.
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3. Lessons for the establishment of Chinese
national emissions from EU experiences
3.1 Possibility and necessity of establishment
national ETS
3.2 The situation and practices of ETS in China
3.3 Lessons for Chinese national ETS
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3.1 Possibility and necessity to establish a
national ETS in China
Possibility:
[1] Political signals
17th Congress Report; Chinese National Climate Change Programme
[2] Institutions :
•
The National Leading Group Dealing with Climate Change, Energy
Conservation and Emission Reduction under State Council;
•
Department of climate change under National development and
Reform Commission (NDRC)
[3] Pressure from Political Pledges and National Plans
•
Reduction of carbon intensity 20% by 2010, 40-45% by 2020
[4] Existing Emissions Trading Programmes: SO2 and CO2
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3.1 Possibility and necessity to establish a
national ETS in China
Necessity:
• Uncertainty of CDM future in post-2012
• International political pressure for mandatory emission
reductions
• Urgent need to establish China’s own rules, improving
negotiation capacity and international influences on price
• Improve energy use efficiency and acquire economic
benefits by the implementation of ETS
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3.2 The situation and practices of ETS in China
[1] China’s first voluntary emissions
trading standard:
 “Panda” standard, December 16th,
2009, Copenhagen, at a IETA Side
Event on the 16th December.
 first voluntary standard to be
created specifically for the Chinese
market
 a domestic voluntary GHG offset
standard
 http://www.pandastandard.org/inde
x.html
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
[2] Trading Platform Establishment:
Top-Three environment exchanges are
located in Beijing, Tianjin and Shanghai
the government-licensed carbon-trading
platform;
[3] CO2 emissions Trading Practices:
Beijing Environmental Exchange & Shanghai-based Tianping Auto Insurance:
Buying 8026 tones of CO2 saved from Green Actions for Olympic Games in
2008;
Tianjin Climate Exchange & Ji-Feng Packaging & Paper Co. Ltd. Shanghai:
voluntary carbon units of 6266 tones of carbon oxides in Voluntary carbon
standard (VCS) APX Registry.
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3.2 The situation and practices of ETS in China
[4] SO2 emissions trading programme:
• Legal Basis:
 Revised ‘law on Prevention and Control of Atmospheric Pollution
 Total Control Policy
 local regulation or interim measures at local level based on the pilot
practices
• Main contents:
 Total Control Policy
 Trading units: quotas
 Trading partners
 Supervisory institutions
• Drawbacks:
 legal support at national level for SO2 emission trading
 command-and-control mechanism
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3.3 Lessons for Chinese national ETS
[1] The establishment of CO2 ETS
•
Legislative hierarchy
•
Legal nature of trade units  license to emit pollutants (National
SO2 system)
•
Harmonisation Cap-setting  voluntary or mandatory
•
Trading partner  company level or sectoral level
•
Administrative authority  Role of Bureau of Environmental
Protection or the third party/Environmental (property) Exchange
•
Accurate Monitoring mechanisms
•
Compliance and Implementation
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
3.3 Lessons for Chinese national ETS
[2] Relation between the new CO2 ETS and the existing SO2
ETP
• Total control policy Cap-setting policy;
• Applied traders free traders;
• Command-and-control within limited region initiative
allocation;
• Price setting and negotiation market-based instrument &
abatement cost divergent;
• Function of environmental protection authority;
• Pilots in sectors  regional or sectoral pilots.
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
Conclusions
 Bringing the experiences from SO2 emissions
trading programme to establish a framework of
CO2 ETS in the pilot regions or sectors;
 Pushing forward both of the ETS with more
market-based instrument and less command-andcontrol instrument with experiences from EU ETS.
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute,
Gent University
Thanks For Your Attention
Email: [email protected]
Thanks for your time
Any questions?
Ping Chen, Faculty of Law- Department Public International law & Maritime Institute, Gent University
Email: [email protected]