An extract from The Environment and Climate Change Law Review, 4th Edition

Climate change

i Source of law and policies

Since China ratified the United Nations Framework Convention on Climate Change, a number of administrative and regulative documents concerning climate change and greenhouse gas (GHG) emission issues have been promulgated, for instance:

  1. China’s National Climate Change Programme (2007);
  2. the White Paper on China’s Policies and Actions for Addressing Climate Change (2011);
  3. the 12th Five-Year Plan (for 2011 to 2015);
  4. the 13th Five-Year Plan (for 2016 to 2020);
  5. the Action Plan for Adaption to Climate Change (2013); and
  6. China’s Policies and Actions for Addressing Climate Change (2016).

However, although it started three years ago, the drafting of the Law on Combating Climate Change is still in progress and has not been put into the recent schedule of the legislature.

ii Regulatory authorities

The Department of Climate Change in the NDRC takes charge of climate change-related regulatory work. However, since there has not been any act of the National People’s Congress or ordinance of the state council, climate change-related law enforcement is very limited, and the authorities are still focusing on rulemaking.

iii Policy focus

China’s National Climate Change Programme illustrates that GHG mitigation should focus on key areas of energy production and transformation, energy efficiency improvement and energy conservation, industrial processes, agriculture, forestry and municipal wastes.

iv Regulated activities

As per the National Action Plan on Climate Change (2014 to 2020) issued by the NDRC, the regime for addressing climate change-related issues includes control of GHG emissions, adapting to climate change, low-carbon pilots and demonstrations, supporting policies, etc. In particular, concerning control of GHG emissions, various industries are specifically regulated, including the energy industry (including electricity and fossil energy), iron and steel industry, architectural material industry (including cement, glass and ceramic), chemical industry, non-ferrous metal industry, paper industry, food and medicine industry and textile industry. Urban and rural construction, transportation area, agricultural activities, commercial activities and waste disposal are also regulated.59

v Domestic carbon trading

On 19 December 2017, the NDRC, upon approval of the State Council, issued the Building Plan for a National Carbon Trading Market (Power Generation Sector), marking the completion of overall design and start of operation, of a national carbon trading system. According to the Building Plan, the system building will involve three steps: building nationwide date-reporting, registration and transaction log systems in the first year, conducting a simulated transaction of allowances in the second year and checking the effectiveness and reliability of the market, and to start spot trading of allowances, and expand the market to cover other products and sectors thereafter, with the ultimate goal of building a carbon market with clear ownership, high-level protection, smooth circulation, effective regulation, fairness and transparency.

According to the MEE, up until August 2018, the total carbon trading volume in seven pilot markets, including Beijing and Tianjin, has reached 6 billion yuan, and the total volume and intensity of carbon emissions have been reduced.60 The Director of Climate Change Division of Ministry of Ecology and Environment pointed out that China’s rapid growth of carbon emissions has been initially reversed and has decreased from rapid to low growth.61 The guiding document on the establishment and operation of the carbon trading market, the Provisional Regulations on Management of Carbon Emissions Trading, has been drafted and the relevant department is striving for the introduction as soon as possible, but the issuance time is not yet confirmed.