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Press Release

Fraunhofer Institute for
Systems and Innovation Research ISI

Emissions trading schemes are being developed around the globe: Special issue on CO₂ emissions trading to lower greenhouse gases in China

Press Release 10.06.2014

Emissions trading schemes (ETS) are being used by a growing number of countries as a market-based policy instrument to reduce greenhouse gas emissions (GHG emissions) and limit climate change. China, the country with the highest greenhouse gas emissions, is currently running several pilot emissions trading schemes and drawing on the experiences of other countries with ETS. For the journal “Energy & Environment”, various authors from the Fraunhofer Institute for Systems and Innovation Research ISI, the Institute of Policy and Management at the Chinese Academy of Sciences in Beijing and others examined how emissions trading is evolving in China and how the country can benefit from the international experiences of other countries with this instrument.

Although traditional environmental economics has laid a strong foundation for the processes and structure of emissions trading schemes, the existing schemes in various countries are facing numerous new challenges and critical issues. The stability of price signals, ETS’s interaction with other policy instruments combating climate change and the burden on companies facing international competition are just some examples.

In a special issue of the journal “Energy & Environment”, ten selected papers discuss important aspects related to these challenges that have major relevance for China in particular, but also worldwide. Topics include the expected impacts of greenhouse gas emissions in China, abatement potentials in key sectors of industry, regulation of the pilot emissions trading schemes in China and coverage of different companies from industry and energy supply, the interaction between emissions trading and other policy instruments as well as investments in carbon abatement technologies. In addition, experiences with downstream carbon trading in California and the EU, upstream trading in New Zealand and sulfur dioxide trading in China are included in the discussion of the Chinese pilot schemes.

As Dr. Wolfgang Eichhammer, Head of the Competence Center Energy Policy and Energy Markets at the Fraunhofer ISI and co-editor of the Special Issue together with Professor Ying Fan of the Chinese Academy of Sciences, sums up: “China has taken an important step towards a standardized national carbon emission trading market by introducing a series of pilot projects in different regions. This will help to spark interest in this market-based policy instrument in other countries around the world. The experiences already gained in this field in Europe and other nations can significantly shorten the learning process for China.”

The individual articles are available to purchase at or from the authors on request.

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.