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The effectiveness of carbon price in emissions trading schemes (ETS) is an important issue in China in the context of its ambitious climate change goals. This paper adopts a staggered difference-in-differences model to estimate whether China's ETS reduced CO2 emissions while maintaining economic growth even under low carbon prices. The results indicate that despite the low carbon prices, the ETS effectively reduced CO2 emissions without undermining the economy. Specifically, an increase of $1 in the carbon price reduced CO2 emissions by 1.69% and increased the per capita GDP by $286. The carbon price primarily achieved emission reduction and promoted economic development through channels, such as technological innovation, foreign direct investment, energy mix, and industrial structure. Carbon leakage to neighboring regions was not evident. Heterogeneity analysis showed that the environmental effects of the carbon price were more pronounced in regions with higher levels of economic development and CO2 emissions. Conversely, the economic effects of the carbon price were more pronounced in regions with lower levels of economic development and CO2 emissions. The carbon price achieved significant economic effects in regions that solely adopted the free allocation mode of emission allowances, while regions that used a combination of free allocation and auctioning experienced substantial emission reduction effects. Despite low carbon prices, China's ETS effectively reduced CO2 emissions without compromising economic growth. This finding provides new empirical evidence for the effectiveness of carbon price as well as decision support for the future promotion of ETS. Technological innovation, FDI, energy mix, and industrial structure are crucial channels through which the carbon price achieves emission reduction and promotes economic development. The absence of carbon leakage to neighboring regions suggests that ETS is an internally effective mechanism for emission control. Heterogeneity analysis showed that regional characteristics and allowance allocation modes can influence the effectiveness of carbon price, thus emphasizing the importance of targeted policy design and appropriate allocation methods. [ABSTRACT FROM AUTHOR]

China has established three rounds of low-carbon pilot city initiatives. However, a gap exists between policy making and successful implementation, and the effects on greenhouse gas (GHG) emission reduction were found to be different among pilots. This paper considers the question of how low-carbon policies in cities can be implemented effectively and how policy combinations are adopted for GHG emissions reduction. It uses a mixed research approach, including Qualitative Comparative Analysis (QCA) and field investigation in Pilot Y (situated in the southwest China). The results show that, first, financial support and monitoring systems are necessary conditions, while political leadership is a sufficient condition. This means that the absence of financial support or monitoring systems could lead to increased GHG emissions, while the presence of political leadership always promotes the reduction of GHG emissions but may not be sufficient on its own to achieve them. Second, the target responsibility system (TRS) – a system used by higher government levels to assess the policy implementation of lower government levels – and human resource mechanisms cannot effectively lead to the promotion of GHG emissions reduction. Finally, in the absence of TRS and human resource mechanisms, environmental information disclosure (EID) was found to effectively promote low-carbon urban development by encouraging public participation. This paper reveals the complexity of the implementation of low-carbon policies in cities, identifies the link between city-level and national action, and enriches the theoretical explanation of governance and low-carbon policy implementation gaps in China. Key policy insights China's low-carbon pilot city project is critical for reducing GHG emissions, however, the effects of the low-carbon pilot city programmes varied greatly. Financial support and monitoring systems are necessary conditions, while political leadership is a sufficient condition to achieve cities' GHG emissions reduction goals. Local low-carbon development is limited and not put into practice at the city level in China, in part because of the absence of financial support and limited political attention. This study highlights the key conditions of organizational behaviour at the meso-level, and enriches the theoretical explanation of environmental policy implementation gaps in China. [ABSTRACT FROM AUTHOR]

Emissions trading schemes (ETS) area is a leading climate policy instrument worldwide and have been widely discussed and researched. However, few studies to date focus on the nexus of ETS and income inequality, an important socioeconomic phenomenon. To fill this gap, taking China as an example, this paper discusses the influence of ETS on income inequality and its dynamic changes using a time-varying differences-in-difference model combined with a propensity score matching approach. The results demonstrate that China's pilot ETS has contributed to reducing income inequality. Various robustness tests support this conclusion. Moreover, the strength of ETS's contribution to reduction in income inequality gradually increases over time. We further analyze the mediating effects of carbon intensity, energy consumption, industrial structure, and technological innovation. ETS reduces income inequality by reducing coal consumption. The regional heterogeneity analysis shows that, unlike in other regions, ETS has a positive impact on income inequality (i.e. it increases it) in the eastern region in China due to its optimized energy structure and relatively complete, open, and flexible economy system. The paper discusses the above findings and their policy implications. It is also designed to promote research on ETS and to diversify research perspectives of income inequality from both theoretical and practical aspects. Evidence from China's pilot experience with ETS shows that it contributes significantly to balancing income distribution and alleviating the increasingly acute social conflicts caused by income inequality. This provides new theoretical and decision support for the promotion of ETS in the future. The energy revolution driven by ETS promotes income redistribution, which is conducive to income equality. Governments should enforce the constraints of ETS on power generation companies; guide capital to invest more in the non-thermal power industry, especially the renewable energy power sectors; and guide and regulate the income distribution in new power sectors. Governments' revenue from ETS can and should be used to further redistribution of income and to reduce income inequality. A higher number of free quotas and a lower carbon price could be imposed on low-profit or labor-intensive industries to reduce their emission costs. [ABSTRACT FROM AUTHOR]

Rapid urbanization and climate change are two grand challenges faced by many cities in pursuing sustainable urban development. While ecosystem-based adaptation practices are increasingly recognized and adopted across the world as an important urban development strategy, their effective implementation in diverse biophysical conditions and development contexts is of interest, requiring scientific research and learning. This paper presents the case of China in implementing an ecosystem-based approach – sponge city development – to address the water-related challenges of urbanization and climate change. It draws on the literature to synthesize understanding of the interaction between the urban landscape, urban development, and ecosystem services, and proposes mainstreaming an ecosystem service framework in spatial planning and performance evaluation to guide ecosystem-based adaption practices. Focusing on China's practice, the paper develops a five-step procedure for operationalizing and mainstreaming ecosystem services so as to improve policy implementation for sponge city development. This paper aims to provide a practical perspective to help enhance ecosystem-based adaptation in urban development to better address the challenges of urbanization and climate change. Cities are increasingly looking into ecosystem-based adaptation, as an integrated part of urban development, to increase resilience to climate change and to promote urban sustainability. China's experience with implementing a national initiative called sponge city development contributes to learning and an understanding of ecosystem-based adaptation practices to address urbanization and climate change challenges. Existing literature shows the need and potential for an ecosystem service framework to guide spatial planning and performance evaluation for ecosystem-based adaptation. China is in a unique position to mainstream an ecosystem service framework in sponge city development to improve current practice and to promote climate-resilient and ecosystem-integrated urban development. A five-step empirical procedure outlines a systematic approach for mainstreaming ecosystem services, contributing to the literature and policy practice to build urban resilience and sustainability in the face of urbanization and climate change. [ABSTRACT FROM AUTHOR]

The United States (U.S.) and China are key to meeting the goals of the Paris Agreement and reaching carbon neutrality by around mid-century. Despite differences, carbon neutrality will be met more rapidly if the two countries coordinate and facilitate synergies in carbon-neutral technologies and policy development and implementation. Building on long-term pathway models in the U.S. and China, current emissions trends and sources, and a policy analysis, this paper puts forward a novel framework for U.S.-China coordination on carbon neutrality. The analysis reveals similar technology and policy pathways, policy gaps, and shared milestones for decarbonization in 2030, 2040, and 2050-2060. The main technological pathways focus on reductions in energy demand and non-energy-related CO2 emissions, decarbonization of electricity and fuels, and increases in electrification rates and CO2 sequestration. Given existing domestic policies and opportunities for further action, areas for coordination on carbon neutrality include common policy milestones; dialogue and technical exchange; research, development, and demonstration (RD&D); and international climate leadership. Despite escalated tensions between the U.S. and China, and challenges for climate cooperation, coordination between both countries on carbon neutrality is both possible and necessary. Carbon neutrality will be met more swiftly if the U.S. and China coordinate and facilitate synergies in carbon-neutral technologies and policy. Despite the rise in geo-political tensions between the U.S. and China, coordination on carbon neutrality is both possible and necessary. An analytical framework for U.S.-China coordination on carbon neutrality, includes technology and policy pathways, and common milestones of key sectors' decarbonization for 2030, 2040, and 2050-2050. The two countries could coordinate on common policy milestones, dialogue and technical exchange, research and development, and international climate leadership. [ABSTRACT FROM AUTHOR]

Controlling household consumption is an essential means to achieve carbon neutrality in China, and population ageing has an important impact on its structure. Since older people exhibit different consumption patterns than younger people, an increase in the proportion of aged people affects overall consumption patterns. This paper adopts an input–output model to reflect the heterogeneity in the consumption structure and household carbon footprint of different age groups, followed by a simulation of the future household carbon footprint. The results find that in China, the total household carbon footprint shows an inverted U-shape with age, with the lowest total carbon footprint coming from aged households (age of household head 65 and above) and the highest total carbon footprint from middle-aged households (age of household head 45–54). The average household carbon footprint decreases with age, with aged households remaining the lowest. Aged households, however, have the highest share of the direct carbon footprint. Interestingly, urban households of all ages have a higher carbon footprint than rural households, with the largest difference being among aged households. The projection results show that based on demographic changes, although the average household carbon footprint of elderly households in China is low, as the number of elderly households increases, the total carbon footprint of elderly households will be sizable and need to be taken seriously. The total carbon footprint of elderly households will become more significant and sizable as the number of elderly households increases. Urban life is more carbon-intensive, and China's urbanization is leading to an increase in the carbon footprint. Aged households require more attention in future climate policies. Targeted, consumption-based climate policies are necessary for carbon reduction in China and will have relevance in other countries with similar consumption structure and demographic trends, e.g. with ageing or rapidly urbanizing populations. [ABSTRACT FROM AUTHOR]

The impacts of climate policies on the global financial system have aroused wide attention all over the world. Fund markets are an important part of the financial system and play a crucial role in the stability of the financial system. In this paper, the impacts of climate policies on fund markets are evaluated from direct and indirect risk contagion channels using the data of Chinese ordinary stock funds and partial stock hybrid funds during 2007–2020. Risk contagion indicates that a fund's selling of stocks causes the stock price to fall, causing asset losses to other funds holding the same stocks. We construct a risk contagion model based on common asset holdings of funds. The analysis of direct risk exposure of funds to climate policy in China shows that five climate-policy-relevant sectors account for more than half of the total value of shareholdings. The climate risk stress-test indicates that ignoring the indirect risk contagion channel significantly underestimates the adverse effects of and climate policies on fund markets. More stringent, short-term climate targets and earlier implementation of climate policies helps to mitigate otherwise drastic changes required in energy markets in China to achieve a 2°C long-term target, and reduces the adverse effects of climate policies on the fund market. Furthermore, the impact of climate policies on different investment funds shows significant differences, leading to winners and losers. The losers are funds that adopt a high-carbon investment strategy, while winners are funds adopting a green investment strategy. Indirect risk contagion significantly increases the adverse effects of climate policies on investment fund markets. Early implementation of climate policy and more stringent short-term targets reduce the adverse effects of climate policies on the fund market. Investment funds can become winners by adopting green investment strategies with the introduction of climate policy. [ABSTRACT FROM AUTHOR]

To facilitate and balance regional economic development and to reduce carbon emissions, China has implemented a series of policies to promote the redistribution of industries and economic activities across regions since 2000. This paper employs a logarithmic mean Divisia index (LMDI) to analyse the dynamic net effect on carbon emissions of Chinese policies promoting economic redistribution across sub-national regions, using a panel data of five sectors in 30 provinces during 1995–2017. The results of our analysis show that the redistribution of industry in particular, but also business and construction activities, leads to an increase in CO2 emissions, while the relocation of agriculture and transportation activities reduces emissions. We also find that the emission increase effect of the transfer of carbon intensive industries to new (host) regions is higher than the emission reduction effect induced by the agglomeration of clean industries in the original (home) regions. However, from 2014–2017, alongside the gradual industrial redistribution, China has also reduced aggregate CO2 emissions by 58.6 MT. In addition, the results show that population migration, which is due to redistribution of industry and other economic activity, has caused higher emission increases than emission reductions due to redistribution policies. We further calculate the marginal effect of industrial redistribution on CO2 emissions and draw out relevant policy implications. Key policy insights Industrial (and other economic activity) redistribution within a county can be not only an economic policy, but also an important policy instrument to mitigate CO2 emissions. This is the case in China. In the process of regional industrial redistribution, policymakers should aim to reduce the emission increase effect of transfer of carbon-intensive industries to host regions and to raise the emission reduction effect induced by an agglomeration of clean industries in home regions. Industrial redistribution is usually a long-term strategy for regional development within a county, and any reduction effects on CO2 emissions are likely to need time to appear. [ABSTRACT FROM AUTHOR]

Since 1982, China's blue carbon management policies have made significant contributions to blue carbon's development. Blue carbon is carbon captured and stored by marine ecosystems and it plays an important role in addressing climate change. Analyzing the evolution of blue carbon management policy is necessary to understand its potential to contribute to climate action, and to improve its management and maximize its effectiveness. This paper considers these issues in China. It used content analysis and ROSTCM6 software to empirically analyze 82 blue carbon management policy documents from China. The evolution of relevant policies and their performance is as follows: First, policy focus has gradually shifted from protecting blue carbon ecosystems to increasing blue carbon stocks; second, policy participants became increasingly diversified; and third, the policy approach has changed from simple protection to comprehensive, integrated land use – marine system management. Although the Chinese government has made progress in blue carbon management policies, it still faces many challenges including blue carbon ecosystem protection; legal status; trading mechanisms; and international cooperation. The development of future blue carbon management policy should focus on optimizing the land use structure of coastal zones, on promoting environmental legislation highlighting blue carbon issues, on supporting the establishment of blue carbon trading mechanisms, and on strengthening its international cooperation in this arena. China's blue carbon management approaches shows that relevant policies contribute greatly to addressing climate change and sustainable development. This provides new theoretical support to promote future development of blue carbon management policies. Establishing a blue carbon trading mechanism provides economic incentives for its management. Blue carbon's property rights, accounting standards, and trading entities need to be further clarified. A detailed legal definition of blue carbon is needed to ensure that appropriate penalties are imposed for the destruction of blue carbon ecosystems. [ABSTRACT FROM AUTHOR]

Although China is the world's largest investor in renewable energy, its overseas energy investments are primarily in fossil fuels. This is a cause of major concern as countries across the globe need to transition toward low-carbon development trajectories to meet the 1.5-degree warming target of the Paris Agreement. In this paper, we present data up until and including 2019 showing that power generation investment in renewables domestically (excluding medium and large hydro) is 77% while only 22% overseas. We add to the literature on the institutional environment surrounding Chinese overseas investment by finding that in addition to general barriers to renewables, such as higher up-front costs and different income cycles, Chinese renewable firms face significant structural financing disadvantages vis-à-vis conventional energy firms. We find that the underlying reason is that Chinese fossil fuel companies are largely state-owned while renewable companies are largely private-owned. The disadvantage then materializes through the Chinese financial system's preference for state-owned enterprises. Lastly, we identify concrete policy options to overcome the disadvantage by addressing five types of actors: 1) policy banks that can emphasize their development focused mandate, 2) state-owned commercial banks currently financing the majority of Chinese overseas energy projects, 3) smaller financial institutions currently not involved in this type of financing overseas, 4) Sinosure, currently focusing on insuring fossil fuel projects, and 5) Chinese energy, utility, and construction companies that would benefit from further diversifying into renewables. Key policy insights The proportion of renewables in Chinese power generation investment is 77% domestically while only 22% overseas. Chinese fossil fuel companies are largely state-owned, while renewable companies are largely private-owned. The key barrier for Chinese renewable energy companies going overseas is their lack of access to finance. Chinese financial institutions favor state-owned over privately-owned organizations, both domestically and overseas. Consequently, a key reason for renewable/fossil disproportions is that Chinese renewable energy companies are largely private-owned. The favoritism can be overcome through policies targeting 1) policy banks, 2) state-owned commercial banks, 3) smaller financial institutions, 4) Sinosure, or 5) Chinese energy, utility, and construction companies. [ABSTRACT FROM AUTHOR]

Financing climate change mitigation and adaptation in Asia is critical for its population and economies but also for those of the world. This editorial provides a commentary and overview of ten articles within this special issue of Climate Policy on 'Green Finance in Asia'. Contributions are diverse in terms of focus and methods. Most of the articles focus on managing transition risk with six of the articles having an energy focus; the dominant themes are the risk of stranded coal assets in China; the role of export finance by China and Japan for fossil fuel-fired power generation assets within Asia; and investment in renewable power generation and the policies to support such investment. The remaining four articles explore various policies in specific country contexts: the effects of green bond policies in China; the greening of monetary policy in China; the governance of sustainable finance in Indonesia; and policies to support investment and finance of off-grid electricity access in Bangladesh. Most of the ten contributions come from researchers in developed countries and principally from non-Asian countries, suggesting there is a need to develop green finance research capability and capacity across Asia. Despite being withing scope of the special issue, this collection does not contain papers on physical risk or adaptation finance. We highlight these as important gaps and priorities for future research. Key policy insights This editorial provides a commentary and overview of ten articles within this special issue of Climate Policy on 'Green Finance in Asia'. Most of the ten contributions come from researchers in developed countries and principally from non-Asian countries. There is a need to develop green finance research capability and capacity across Asia. Most contributions were focussed on transition risk, with limited or no focus on physical risk and adaptation finance. This likely reflects the multiple resource and expertise challenges faced when conducting physical risks assessments. [ABSTRACT FROM AUTHOR]

Government policies that contain incentives have promoted the development of China's electric vehicle (EV) market from its inception. However, following the dramatic evolution of the EV market, the incentives impose a considerable burden on the State. It is time to consider abolishing various policy incentives. This paper uses the discrete choice experiment (DCE) model to study how consumer behaviours are influenced by the different policies. A system dynamics simulation model is constructed to simulate long-term EV development trends while considering the impacts of these policies. The simulations use the results from the DCE model to measure the sensitivity to policy changes of consumer purchase intentions (measured by consumers' willingness to purchase EVs). Finally, in relation to likely future policy trends, this study designs policy portfolio scenarios that are a strong mix, mid-mix, weak mix, or fully market-oriented with varied timing for policy implementation, and that are likely to affect the growth of China's EV market. The results of the simulation indicate that the optimal policies: (1) continue to increase government expenditure and support for the construction of charging facilities; (2) make charging more accessible and convenient; and (3) implement bans on the sale of fossil-fuelled cars. The results also show that the ideal timing for banning the sale of fossil-fuelled cars and, in parallel, cancelling current incentive policies (e.g. consumer purchase subsidies) is around 2025. These changes could reduce government expenditure and thus confer substantial financial savings, and they would effectively promote a significant increase in EV sales. Key policy insights Increasing support for the construction of charging facilities, improving the access and convenience of charging, and implementing bans on the sale of fossil-fuelled cars could increase consumer willingness to purchase EVs in China. Support for the construction of basic charging facilities should continue to increase and accelerate leading up to 2025; this would promote a significant increase in EV sales. To send clear near-term signals to the EV market – both consumers and producers, the Chinese government could usefully implement a ban on the sale of fossil-fuelled cars by around 2025 and in parallel abolish the current incentives policy for EVs. Abolishing current policy incentives (e.g. subsidies and VAT tax exemption) in the same time frame as other policies (e.g. support for charging infrastructure and a ban on fossil-fuelled cars), could lead to substantial financial savings to the government and a rapid scaling in the market for EVs. Lessons learned from China's potentially large and rapidly growing EV market will have implications for other countries in Asia and beyond. [ABSTRACT FROM AUTHOR]

China's pilot carbon trading policy is expected to be both efficient and flexible in reducing carbon emissions through incentivising low-carbon innovation. This paper analyses the effects of this pilot policy on low-carbon innovation using a difference-in-difference model, based on a sample of selected enterprises and carrying out a series of robustness tests to corroborate the results. The analysis shows that the pilot carbon trading policy is predicted to have a significantly positive effect on the low-carbon innovation of enterprises that fall under its scope, notably by alleviating obstacles to the financing of low-carbon innovation. Furthermore, a heterogeneity analysis of enterprises' characteristics and carbon allowance allocation methods in different pilots indicates that the effect of the pilot carbon trading policy on enterprises' low-carbon innovation will be reflected mainly in enterprises in China's eastern provinces, and in state-owned enterprises. Compared with the grandfathering and historical intensity allocation methods, the findings of this study suggest that the extent of low-carbon innovation is significantly greater when the benchmarking method is used. The results of this paper offer some key insights into improving the policy design of a nationwide carbon trading market in China, as well as a reference point for other countries and regions, especially developing countries, in establishing a carbon trading market. Key policy insights China's pilot carbon trading policy can promote low-carbon innovation. Easing the financing constraints of enterprises can promote low-carbon innovation. Compared with the grandfathering and historical intensity allocation methods, using the benchmarking method significantly improves the enterprises' low-carbon innovation. [ABSTRACT FROM AUTHOR]

An effective system for monitoring, reporting and verification (MRV) is the cornerstone of any carbon emissions trading market. This paper analyses existing MRV frameworks in China, including under the seven emission trading pilot schemes, to identify four key challenges for the establishment of an effective MRV system for China's forthcoming national carbon emissions trading market: (1) ambiguity in the legal status of relevant policies and regulations, (2) unclear requirements for the content of monitoring plans, (3) lack of consistency and harmonization in accounting and reporting guidelines, and (4) lack of information technology (IT). The paper then considers the experiences and lessons of the European Union Emissions Trading Scheme (EU-ETS) and the MRV systems in the seven carbon emissions trading pilots, and puts forward suggestions for tackling the four key challenges. [ABSTRACT FROM AUTHOR]

High transition costs remain a major barrier to deeply decarbonizing sectors such as transport in many developing countries. Choice of mode and complementary policies are critical to shaping the costs of climate mitigation in the transport sector. This paper investigates the potentials offered by combined technological and behavioural changes stimulated by strategic infrastructure deployment that can facilitate decarbonization of transport in China. Our study is carried out using IMACLIM-R, a state-of-the-art integrated assessment model, which includes a detailed representation of transport dynamics by incorporating the behavioural determinants of mobility in a standard transport modelling framework. More specifically, this behavioural representation considers (i) the spatial organization of residential dwellings and industrial production, (ii) modal shift induced by transport infrastructure deployment and (iii) the intensity of freight transport production and distribution processes. It is found that supplementing carbon pricing with behavioural measures and a decoupling of economic activity from mobility needs can efficiently promote a modal shift towards low-carbon transport modes and reallocate the sectoral distribution of mitigation efforts. This in turn would significantly reduce the macro-economic impacts of deeply decarbonizing Chinese transport activities over the next decades. Complementary policies should focus on infrastructure, fiscal incentives, land-use, building regulations and other policies affecting the ways urban activities are distributed within the city's boundary, along with industrial policies and other regulations that affect where firms choose to locate. Key policy insights To decarbonize China's transport sector an integrated approach is needed due to strong inertia and distributional effects. Complementary policies have to focus on transport infrastructure, fiscal incentives, land-use and building regulations, as well as spatial organization. Transport-related climate policies interconnect with the ways in which urban activities are distributed within the city's boundary, but also with industrial policies and other regulations that affect where firms choose to locate. A suite of policy instruments is required, including larger institutional incentives and greater financial leverage supporting innovations in the transport sector. [ABSTRACT FROM AUTHOR]

China's overseas investment flows (US$ 183 billion) and stock (US$ 4.7 trillion) reached a record peak in 2016, second only to those of the US. A major cause for concern lies in the environmental sustainability of China's overseas investment portfolio, which is compounded by the lack of transparency of China's main development finance arms. We intend in this paper to give an update on the magnitude of green finance in China's overseas investment and development finance portfolio on the basis of the best available estimates, and to put these figures into a broader perspective of multilateral development banks' commitments and practices to combat climate change. We derive practical policy recommendations that Chinese development banks could take to further align China's overseas investment with the 2°C target of the Paris Agreement, with the first step being to revise the 'host country standard' principle, to ensure that Chinese development banks use the most stringent of the two environmental standards, abroad or at home. Key policy insights Chinese development banks lend, give or invest between US$ 38 billion and US$ 45 billion every year to developing countries, without either elaborating on, or integrating, the provisions of the Paris Agreement into their investment strategy. Regulations and safeguards are much more stringent for China's domestic investment than for China's overseas investment, and this stringency gap has been widening over recent years. As a step towards aligning Chinese overseas investment with the Paris Agreement, Chinese development banks could revise the 'host country standard principle'. They could instead choose the highest among the two – recipient country or Chinese domestic – in terms of environmental stringency, consequently harmonizing overseas environmental regulation and safeguards with those that apply domestically. [ABSTRACT FROM AUTHOR]

With cities being responsible for up to 70% of energy-related carbon emissions, municipal governments worldwide are becoming increasingly aware of their responsibility to act. Many large cities have committed to mitigation by becoming member of a municipal climate network, such as the C40 or the Compact of Mayors. However, there is no consistent assessment of whether membership of such networks translates into measurable outcomes. To fill this gap, we propose the use of novel outcome variables, combining financial data with geospatial information. As a starting point, this paper compares utility-scale investment in photovoltaics (PV) within the administrative boundaries of large global cities, combining the Bloomberg New Energy Finance database with information from Google Maps. We analyse 512 global cities with a population of above 1 million, and consider the impact of 5 networks and 2 reporting platforms. The results suggest that membership of the C40 network has a positive effect on utility-scale solar PV investment, while no such evidence is found for any of the other networks or reporting platforms under study. Based on our findings, we recommend that municipal climate networks increase their efforts to trigger city regulation that is conducive to solar PV investment. More generally, measuring early indicators, such as low-carbon investment, can help municipal climate networks in their role as 'commitment brokers' for climate action on the ever-more important city level. Key policy insights Cities have considerable policy space to foster utility-scale solar PV investment within their administrative boundaries. While some large global cities exhibited significant growth in utility-scale solar PV, many others with good solar potential did not have a single project by the end of 2016. Outside of China (where city boundaries often include rural areas), Tokyo tops the list with utility-scale solar PV projects by far, followed by San Diego and Rome. Membership of the C40 network appears to make a positive difference to PV investment, unlike other networks or reporting platforms. Outcome measures like low-carbon investment can be used more generally to assess the climate action performance of cities. [ABSTRACT FROM AUTHOR]

Renewable energy curtailment is a critical issue in China, impeding the country's transition to clean energy and its ability to meet its climate goals. This paper analyzes the impacts of more flexible coal-fired power generation and improved power dispatch towards reducing wind power curtailment. A unit commitment model for power dispatch is used to conduct the analysis, with different scenarios demonstrating the relative impacts of more flexible coal-fired generation and improved power dispatch. Overall, while we find both options are effective in reducing wind power curtailment, we find that improved power dispatch is more effective: (1) the effect of ramping down coal-fired generators to reduce wind power curtailment lessens as the minimum output of coal-fired generation is decreased; and (2) as a result, at higher wind capacity levels, wind curtailment is much more significantly reduced with improved power dispatch than with decreased minimum output of coal-fired generation. Key policy insights China should emphasize both coal power flexibility and dispatch in its policies to minimize renewable power curtailment and promote clean energy transition. China should accelerate the process of implementing spot market and marginal cost-based economic dispatch, while making incremental improvements to the existing equal share dispatch in places not ready for spot market. A key step in improving of dispatch is incorporating renewable power forecasts into the unit commitment process and updating the daily unit commitment based on the latest forecast result. China should expand the coal power flexibility retrofit programme and promote the further development of the ancillary service market to encourage more flexibility from coal-fired generation. [ABSTRACT FROM AUTHOR]

This paper estimates the potential influence of China's future nationwide carbon market on clean technology innovation. To overcome data limitation issues, the energy price is adopted as a proxy for the carbon price to estimate its impact on clean innovation and R&D. Then, a counter-factual method is introduced in which the potential carbon price is mapped onto the equivalent percentage change of energy price by sector. According to our results, the carbon market shows both a redirection and a crowding-out effect on technology innovation, with the former overwhelming the latter. If the future nationwide carbon market yields a carbon price of 50 Yuan, our findings estimate that it would result in an increase in the quantity and proportion of clean invention patents in ETS-covered sectors of 2.2% and 3%, respectively, and in an increase in the quantity and proportion of clean utility patents of 3.6% and 1.4% respectively. However, the effect on overall R&D is negative, indicating that carbon costs might crowd out some R&D expenditures, but in a limited manner. Generally, the carbon market in China is expected to help redirect technology innovation onto a cleaner path. [ABSTRACT FROM AUTHOR]

China is now in the process of building its national carbon emissions trading scheme (ETS). Data are the foundation for the design and operation of an ETS. This paper presents a comparative analysis of the data requirements for China's national ETS construction and the existing ETS-related data for enterprises in China. In doing so, it identifies the underlying data gap in building China's national ETS in terms of data availability and data quality. Based on the experiences of international ETSs, and experiences at national and pilot levels in China, we propose two short-term strategies and four long-term solutions to meet the challenges from technical and management perspectives. [ABSTRACT FROM AUTHOR]

In December 2015, China joined 190 plus nations at Paris in committing to the goal of limiting the rise in global average temperature to ‘well below’ 2°C. Carbon budget analysis indicates that goal will require not only that the European Union and US reduce their emissions by greater than 80% by 2050, but that China at least comes close to doing so as well, if any budget is to be left over for the rest of the world (RoW). Given that RoW emissions are, and will come from, low-income and emerging nations, China’s emission reduction potential is of no small consequence. In this paper, we use the Kaya identity to back out changes in the drivers of CO2 emissions, including gross domestic product (GDP), energy intensity (E/GDP) and the carbon content of energy (C/E), the latter two calculated to be consistent with China’s long-term GDP growth rate forecasts and specified 2050 CO2 emission reduction targets. Our results suggest that even achieving China’s highly optimistic renewable energy targets will be very far from sufficient to reduce China’s CO2 emissions from 9.1 Gt it emitted in 2015 to much below 3 Gt by 2050. Even reducing its emissions to 5 Gt will be challenging, yet this falls far short of what is needed if the world is to meet its ‘well below’ 2°C commitment. Key policy insights Under the Paris Agreement there is great pressure on China to very substantially reduce its emissions by 2050. While China has attached great importance to renewables and nuclear energy development, even achieving the most optimistic targets would not be sufficient to reduce China’s emissions from 9.1 Gt in 2015 to much below 3 Gt by 2050. China’s emission reduction potential falls far short of what is needed if the world is to meet its Paris ‘well below’ 2°C commitment, even if the EU and US reduce their emissions to zero by 2050. Emission cuts consistent with the Paris Agreement will require that China and the world give much greater weight to advancing research and development of scalable low-, zero- and negative-carbon sources and technologies. [ABSTRACT FROM AUTHOR]

In 2013, China launched its domestic pilot emissions trading scheme (ETS) as a cost-effective strategy to reduce CO2emissions. Theoretically, the ETS can interact with the feed-in tariffs (FITs) applied to renewable energies (REN). This article presents a simple method to demonstrate how FITs can be adjusted based on the evolution of ETS carbon prices in order to provide a cost-effective climate policy package in China. First, by using provincial data and wind and solar power as examples, it calculates the implicit carbon prices that FITs generate in different Chinese provinces and finds that they are much higher than current carbon prices in the pilot ETS. This shows the necessity of using both instruments to guarantee current level incentives to develop REN for climate change purposes, at least in the short and medium terms. Second, by keeping the annual total carbon price level stable (the sum of the implicit FIT carbon price and the ETS carbon price), and taking into account the cost evolution of REN development, this article demonstrates, for the 2018–2020 period, that FIT should decrease at an annual rate of 3.04–4.63% (for wind) and 7.84–8.87% (for solar) based on different growth rates for progressive national ETS carbon prices. Policy relevance There are a number of studies and debates on the interactions between climate policies in Europe in particular, ETS and subsidies for REN. The key issue is that a climate policy package should be cost-efficient and the implementation of one policy should not jeopardise the performance of another. For a country like China, a considerable scale effect on climate target achievement and total cost savings could be produced by the careful design of the climate policy package. FIT and ETS, which are cost-efficient policies if implemented separately, will very probably constitute a major climate policy package in the future in China, which is aiming to limit the use of command-and-control policies. So far, there is some debate on how to reduce FIT for wind power in China due to development cost changes. But discussions are lacking on the linkage between FIT and ETS. This paper fills this gap. [ABSTRACT FROM AUTHOR]