Inspection and Enforcement in Chinese Carbon Emissions Trading: Progress, Problems, and Prospect
![handle is hein.journals/elrna44 and id is 632 raw text is:
Inspection and
Enforcement in
Chinese Carbon
Emissions
Trading: Progress,
Problems, and
Prospect
by Huizhen Chen
Huizhen Chen is a joint training Ph.D. candidate in the
School of Law of Sun Yat-Sen University in China, and the
Faculty of Law of Maastricht University in the Netherlands.
Summary
China is establishing a carbon emissions trading
scheme and has initiated a number of pilot projects
with robust measurement, reporting, and verification
systems and rigorous sanctions for noncompliance.
Although the project designs vary, they share a num-
ber of features, including favoring self-monitoring,
self-reporting, and third-party verification. Policy-
makers are also considering a program of emissions
permits and monitoring, and there are indications
that the program will include the authority to impose
major financial penalties for noncompliance. Estab-
lishing an enforcement system has its challenges, how-
ever, particularly around the legality of rules adopted
in the pilot projects and the authority of the central
and local governmental entities that will be enforcing
these requirements. A multi-level enforcement system
implemented by central and local authorities that is
consistent with the Chinese legal system and a gradual
harmonization or centralization of authority may hold
promise for developing an effective system.
I. China's Commitment to Reducing
Carbon Dioxide Emissions
Climate change presents global challenges for sustainable
development. As a developing country, China is not bound
by the greenhouse gas (GHG) emissions reduction target
of the Kyoto Protocol. However, the reduction of carbon
dioxide (CO2) emissions has been established as a binding
target in the Guidelines of the Twelfth Five-Year Planning
on National Economic and Social Development, which
was passed by the National People's Congress on March
14, 2011. Specifically, China has stated its intent to reduce
its CO2 emissions within the next five years by 17% per
unit of gross domestic product (the so-called carbon inten-
sity), compared with emissions in 2005.1
The Chinese government has announced its intention
to establish a GHG emissions trading scheme (ETS). The
Twelfth Five-Year Planning Guideline, which covers the
years 2011 to 2015, states explicitly that a carbon emissions
trading market will be established gradually.2 Activity
began with a notice issued by the National Development
and Reform Commission on October 29, 2011, granting
seven provinces and municipalities-Beijing, Chongqing,
Guangdong, Hubei, Shanghai, Shenzhen, and Tianjin
-the right to start pilot ETS projects3 in an attempt to
explore different models of emissions trading at the local
level before the possible establishment of a national ETS.
As of the end of 2013, the pilot projects in Beijing,
Guangdong, Shanghai, Shenzhen, and Tianjin had been
officially launched. Each of these pilot projects is designed
and implemented independently by the local government,
resulting in variations in the design features in each proj-
ect. However, several important design features are also
common to all projects.
One aspect of particular importance is the develop-
ment of effective enforcement measures to ensure a high
level of compliance and efficient functioning of emissions
trading. Only with high levels of compliance by the emit-
Author's Note: 7he author is very grateful to Prof Maran Peeters
and Prof Li Zhiping for their helpful comments and advice on
the draft of this Article, but the views and analysis herein are the
fiull responsibility of the author. 7he author is also grateful to the
Environmental Law Reporterfor the language editing ofthis Article.
1. NAT'L PEOPLE'S CONG. OF PEOPLE'S REPUBLIC OF CHINA, GUIDELINES OF
THE TWELFTH FIVE-YEAR PLANNING FOR NATIONAL ECONOMIC AND SOCIAL
DEVELOPMENT [Zhonghua Renmin Gongheguo Guomin Jingji He Shehui
Fazhan Di shier ge Wunian Guihua Gangyao] (Mar. 16, 2011) (in Chinese;
author's translation).
2. Id. at ch. 21,§ 1.
3. NAT'L DEV. & REFORM COMM. OF PEOPLE'S REPUBLIC OF CHINA, NOTICE
ON INITIATING PILOT PROGRAMS OF EMISSIONS TRADING [Guojia Fazhan
Gaige Wei Bangongting Guanyu Kaizhan Tanpaifangquan Jiaoyi Shidian
Gongzuo De Tongzhi] (Oct. 29, 2011) (in Chinese; author's translation).
ENVIRONMENTAL LAW REPORTER
44 ELR 10596
7-2014](ViewImageLocal?handle=hein.journals/elrna44&div=83&collection=&method=preview&ext=.png&size=3)
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Inspection and Enforcement in Chinese Carbon Emissions Trading: Progress, Problems, and Prospect
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