A fair trade? Expert perceptions of equity, innovation and public awareness in China’s future Emissions Trading Scheme

How can the Chinese emissions trading scheme (ETS) be redesigned or improved to better address issues of fairness and equity, innovation and learning, and awareness and social acceptance? In order to meet its 2030 carbon emission reduction pledges, the Chinese government has announced plans for a fully implementable national carbon ETS after 2020. This scheme is set to become the world’s most significant carbon trading market and it could cover half of all Chinese CO2 emissions (as much as 4 billion tons of carbon dioxide). In this study, we qualitatively analyze the Chinese ETS through the lens of three interconnected themes—equity, innovation, and awareness—which are disaggregated into six specific dimensions. We then explore these themes and dimensions with a mixed methods and original research design involving a survey of 68 Chinese experts as well as 34 semi-structured research interviews with respondents from local governments, financial institutions, technology service companies, universities, industries, and civil society groups. We find that uneven economic and social growth could exacerbate any initial permits allocation scheme that could be a cornerstone for an ETS. Substantial technological and institutional uncertainties exist that could also hamper development and enforcement. Low or negative awareness among the public and private sector were identified as also being significant barriers for ETS implementation.