Making Carbon Markets in China’s Cities

Abstract

This thesis investigates the evolution of China’s carbon markets in context of the country’s recent climate governance initiatives. Carbon markets in China began as seven pilot markets in seven different cities from 2012 to 2021, feeding into the multi-cities model of the national carbon market which has been in operation from 2021 to present. The thesis develops three in-depth case studies of the city-based pilot carbon markets of Beijing, Shanghai, and Hubei that now play the most important roles in the national carbon market. Combining political economy and cultural economy theoretical frameworks with literature that foregrounds the regionalism and distinctive centralisation-localisation dynamics of the Chinese political economy, analysis centres on the heterogeneous processes of carbon market-making in each of the three cities during the pilot period. Attention is drawn to the different responsibilities and cooperative and competitive interrelationships between private and public actors in the heterogeneous processes of making carbon markets in each city. The city-level case studies inform the analysis that is also offered by the thesis of the specific features and tensions of the national carbon market in China.
This thesis makes four main analytical arguments about the making of carbon markets in China’s cities. First, across the city-based pilot markets and in China’s national carbon market, carbon takes on different economic forms - as both a property right to emit and a commodity to be traded – in different contexts and stages of market-making. Second, city governments play different roles in the establishment of variegated pilot markets and in the workings of the national market, in conjunction with central government and non-state actors such as local firms and third-party verifiers. Third, while central and local governments have played significant legislative and regulatory roles in the making of China’s carbon markets, the establishment of MRV (monitoring, regulating and verifying) is also a market-led and socio-technical process. Fourth, the dynamic state-city relations which are prominent in the making of carbon markets are embedded in and reflect wider governance arrangements that prevail in China’s political economy.


Underpinned by extensive research which combined policy document analysis, semi-structured interviews with public and private actors, and a multi-sited ethnography in state and non-state organizations, the thesis contributes more broadly to ongoing research into the making of carbon markets elsewhere in the world, and to understanding the roles played by both cities and the Chinese state in climate change governance across globe.