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Comments on a Hybrid Mechanism of Carbon Reduction for China

Received: 24 October 2018     Accepted: 16 November 2018     Published: 24 December 2018
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Abstract

As a responsible big country, China take it seriously to counter global climate change. Among two market-oriented emission reduction mechanisms (Cap-and-Trade and carbon tax), China selected Cap-and-Trade to build up the carbon emission reduction system. Since December 2013, seven provinces or cities include Beijing, Tianjin, Shanghai, Guangdong, Shenzhen, Hubei and Chongqin started the experimental work of Cap-and-Trade. On December 18, 2017, the National Development and Reform Commission initiate the national market construction of Cap-and-Trade firstly in the industry of power generation. Whereas, the present cap-and-Trade mechanism of China exists obvious defects which will influence negatively the anticipated targets of carbon reduction. In this thesis, the author has used the method of Historical Analysis, method of Comparison, method of Economical Analysis and method of Normative Analysis to do the research about China’s present Cap-and-Trade and pointed out that it has obvious defects which include the defect of unfairness, the defect of ineffectiveness, the defect of inherent shortcoming, the defect of benefit privatization and the defect of lag developing. To perfect the defects, this thesis put forward a hybrid new mechanism which incorporate simultaneously price based carbon tax with amount based Cap-and-Trade. Under the new hybrid mechanism, all emitters should undertake emission reduction responsibilities and the enthusiasm of emitters to take part in the emission trading system will be greatly improved, also the emission trade volume and vitality will be improved, and the emission reduction target set in the Intended Nationally Determined Contributions Document (INDC) of China will have a reliable guarantee to be obtained. Under the new hybrid mechanism, Carbon Tax Border Adjustment being a key supporting measure, the implementation of it will not violate the multilateral trade rules and will consistent to the spirit of the principles of CBDR of Kyoto Protocol. Further, the impacts of Carbon Tax Border Adjustment on trade, production and consumption are neutral, the management and operation of Carbon Tax Border Adjustment is feasible.

Published in Social Sciences (Volume 7, Issue 6)
DOI 10.11648/j.ss.20180706.18
Page(s) 291-297
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Hybrid Mechanism, Cap-and-Trade, Carbon Tax, Border Adjustment

References
[1] Paris Agreement. United Nations Framework Convention On Climate Change. FCCC/CP/2015/L.9.
[2] Paris Climate Change Conference reached A Historical Agreement, China Youth, December 14, 2015
[3] Hanxu, National Carbon Trading System Construction Accelerated, Future Carbon Reduction Rely On Market. Economics Daily Report, September 14, 2015, http://www.cneeex.com/detail.jsp?main_colid=216&top_id=213&main_artid=7073.
[4] Gen Zezhou, Yang Dapeng, Research Trends on Carbon Tax and Cap-and-Trade, Anhui Agricultural Science Bulletin, Vol. 18, No. 13 (2012).
[5] Karsten Neuhoff & Roland Ismer, International Cooperation to Limit the Use of Border Adjustment, Summary of a Workshop Convened by Climate Strategies, Geneva, Sept. 10, 2008.
[6] Sarah Davidson Ladly, Border Carbon Adjustments, WTO-Law and the Principle of Common But Differentiated Responsibilities. Int Environ Agreements (2012) 12:63-84. At P67.
[7] Long Yingfeng, Comments on the Legitimacy and Consistency with CBDR of Carbon Tax Border Adjustment, the third prize of the Tenth Forum of Jurists of China, July 2015.
[8] WTO, BORDER TAX ADJUSTMENTS, REPORT OF THE WORKING PARTY, Adopted on December 2,1970.(L/3464). Article 4.
[9] Ben Lockwood and John Whalley, Carbon-motivated Border Tax Adjustments: Old wine in Green Bottles? The World Economy (2010).
[10] M. Benjamin Eichenberg, GREENHOUSE GAS REGULATION AND BORDER TAX ADJUSTMENTS. THE CARROT AND THE STICK, Golden Gate University Environmental Law Journal, spring, 2010. part III. A.
[11] Felicity Deane, The WTO, the national Security Exception and Climate Change, CCLR. 2,149—158 (2012).
[12] Charles E. Mclure, Jr. The GATT-Legality of Border Adjustment for Carbon Taxes and the Cost of Emission Permits: A Riddle, Wrapped in a Mystery, Inside an Enigma. II Fla. Tax Rev. At Part 111. A. 1. C. P25.
[13] Roland lsmer and Rarslen Neauhoff, Border Tax Adjustment: A Feasible way to support Stringent Emission Trading, 24EUR. J. L. & Econ. 137(2007).
[14] eeHarro Van Asset, Thomas Brewer & Michael Mehling, Addressing Leakage and competitiveness in U.S. Climate policy: Issues Concerning Border Adjustment Measures, Climate Strategies Working Paper 52(2009), at 51..
[15] Commission of European Communities, Communication from the Commission to the Council and the European Parliament, Bring our Needs and Responsibilities Together--Integrating Environmental Issues with Economic Policy, COM (2000)576 Final. pp. 9-10.
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    Yingfeng Long. (2018). Comments on a Hybrid Mechanism of Carbon Reduction for China. Social Sciences, 7(6), 291-297. https://doi.org/10.11648/j.ss.20180706.18

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  • @article{10.11648/j.ss.20180706.18,
      author = {Yingfeng Long},
      title = {Comments on a Hybrid Mechanism of Carbon Reduction for China},
      journal = {Social Sciences},
      volume = {7},
      number = {6},
      pages = {291-297},
      doi = {10.11648/j.ss.20180706.18},
      url = {https://doi.org/10.11648/j.ss.20180706.18},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ss.20180706.18},
      abstract = {As a responsible big country, China take it seriously to counter global climate change. Among two market-oriented emission reduction mechanisms (Cap-and-Trade and carbon tax), China selected Cap-and-Trade to build up the carbon emission reduction system. Since December 2013, seven provinces or cities include Beijing, Tianjin, Shanghai, Guangdong, Shenzhen, Hubei and Chongqin started the experimental work of Cap-and-Trade. On December 18, 2017, the National Development and Reform Commission initiate the national market construction of Cap-and-Trade firstly in the industry of power generation. Whereas, the present cap-and-Trade mechanism of China exists obvious defects which will influence negatively the anticipated targets of carbon reduction. In this thesis, the author has used the method of Historical Analysis, method of Comparison, method of Economical Analysis and method of Normative Analysis to do the research about China’s present Cap-and-Trade and pointed out that it has obvious defects which include the defect of unfairness, the defect of ineffectiveness, the defect of inherent shortcoming, the defect of benefit privatization and the defect of lag developing. To perfect the defects, this thesis put forward a hybrid new mechanism which incorporate simultaneously price based carbon tax with amount based Cap-and-Trade. Under the new hybrid mechanism, all emitters should undertake emission reduction responsibilities and the enthusiasm of emitters to take part in the emission trading system will be greatly improved, also the emission trade volume and vitality will be improved, and the emission reduction target set in the Intended Nationally Determined Contributions Document (INDC) of China will have a reliable guarantee to be obtained. Under the new hybrid mechanism, Carbon Tax Border Adjustment being a key supporting measure, the implementation of it will not violate the multilateral trade rules and will consistent to the spirit of the principles of CBDR of Kyoto Protocol. Further, the impacts of Carbon Tax Border Adjustment on trade, production and consumption are neutral, the management and operation of Carbon Tax Border Adjustment is feasible.},
     year = {2018}
    }
    

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    Y1  - 2018/12/24
    PY  - 2018
    N1  - https://doi.org/10.11648/j.ss.20180706.18
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    AB  - As a responsible big country, China take it seriously to counter global climate change. Among two market-oriented emission reduction mechanisms (Cap-and-Trade and carbon tax), China selected Cap-and-Trade to build up the carbon emission reduction system. Since December 2013, seven provinces or cities include Beijing, Tianjin, Shanghai, Guangdong, Shenzhen, Hubei and Chongqin started the experimental work of Cap-and-Trade. On December 18, 2017, the National Development and Reform Commission initiate the national market construction of Cap-and-Trade firstly in the industry of power generation. Whereas, the present cap-and-Trade mechanism of China exists obvious defects which will influence negatively the anticipated targets of carbon reduction. In this thesis, the author has used the method of Historical Analysis, method of Comparison, method of Economical Analysis and method of Normative Analysis to do the research about China’s present Cap-and-Trade and pointed out that it has obvious defects which include the defect of unfairness, the defect of ineffectiveness, the defect of inherent shortcoming, the defect of benefit privatization and the defect of lag developing. To perfect the defects, this thesis put forward a hybrid new mechanism which incorporate simultaneously price based carbon tax with amount based Cap-and-Trade. Under the new hybrid mechanism, all emitters should undertake emission reduction responsibilities and the enthusiasm of emitters to take part in the emission trading system will be greatly improved, also the emission trade volume and vitality will be improved, and the emission reduction target set in the Intended Nationally Determined Contributions Document (INDC) of China will have a reliable guarantee to be obtained. Under the new hybrid mechanism, Carbon Tax Border Adjustment being a key supporting measure, the implementation of it will not violate the multilateral trade rules and will consistent to the spirit of the principles of CBDR of Kyoto Protocol. Further, the impacts of Carbon Tax Border Adjustment on trade, production and consumption are neutral, the management and operation of Carbon Tax Border Adjustment is feasible.
    VL  - 7
    IS  - 6
    ER  - 

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Author Information
  • Law School, Shanghai Lixin University of Accounting and Finance, Shanghai, China

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