Executive summary
China, as the world’s largest emitter, has seen significant developments of its ETS in the past years and its ETS development is expected to influence climate action around the world, particularly for its neighboring countries. Against this backdrop, this report analyses whether China’s climate ambition and ETS development can drive regional harmonisation of ETSs (e.g. in Southeast Asia) and how China’s ETS would be possibly linked with other countries, in regard to political alignment as well as technical design.
The factors that are analysed include domestic environmental, political, and economical motivation of respective jurisdictions, the relationship between jurisdictions, as well as ETS robustness, and system design of respective ETSs.
While currently ETS developments in the selected countries of China, Vietnam, Indonesia, Thailand, and the Philippines is still ongoing, the study finds several important parallels, but also relevant divergence in ETS developments in these jurisdictions, making future harmonisation challenging: China’s national ETS is expected to be officially launched in 2021, while Vietnam recently adopted a revised law and created a mandate for ETS implementation; Indonesia and Thailand are still discussing and drafting ETS legislation, while ETS development in the Philippines needs further acceleration.