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[JCA] China’s Climate Policy: Transition, Governance, and Market

Tommy Keum
Tommy Keum Secretary-General, IOCSS Foundation. Researcher in sports philosophy, Korean Peninsula policy, and cultural theory. Founded IOCSS in Seoul in 2023.
4 min read
Asia Watch News

Source: Journal of Contemporary Asia  |  Published: 2026-06-19

Category: 아시아 정치경제  |  Keywords: china, governance, policy, transition


The accelerating urgency of climate change has fundamentally reoriented global political economy, compelling states to reconcile ecological imperatives with development ambitions, industrial legacies, and governance architectures that were never designed with decarbonization in mind. Nowhere is this tension more consequential than in China, the world's largest emitter of greenhouse gases and simultaneously one of the most ambitious actors in renewable energy deployment. As the international community grapples with the inadequacy of existing multilateral frameworks to drive emissions reductions at the required scale and pace, China's domestic climate governance trajectory commands analytical attention not merely as a case study in policy design but as a structural variable shaping the global energy transition itself. The article under review, published in the Journal of Contemporary Asia, contributes to a growing body of scholarship that examines how China is navigating the intersecting pressures of state-led governance, market liberalization, and the political economy of industrial transformation — a nexus that holds implications far beyond the country's borders.

At the heart of any serious analysis of China's climate policy lies the question of governance architecture. China's political system concentrates authority at the central level while distributing implementation responsibilities across provincial and local governments whose interests frequently diverge from national targets. The tension between central mandates and subnational compliance has been a recurring feature of Chinese environmental governance, and climate policy is no exception. Provincial economies vary enormously in their energy mix, industrial base, and fiscal capacity, meaning that a uniform decarbonization trajectory imposed from Beijing necessarily encounters structural resistance. The scholarship emerging from this context highlights how China has attempted to resolve this tension not through simple command-and-control mechanisms but through a hybrid model that combines regulatory directives with market-based instruments. The introduction of the national emissions trading scheme, which became fully operational in 2021 and covers the power sector, represents the most significant institutional expression of this hybrid approach. By placing a price on carbon within a system calibrated to Chinese conditions rather than imported wholesale from European or American precedents, Beijing has signaled a commitment to market mechanisms while retaining the state's prerogative to set the parameters within which those mechanisms operate.

The market dimension of China's climate governance warrants particular scrutiny because it illuminates deeper questions about the relationship between state capitalism and ecological transition. China's model does not conform neatly to either a purely statist paradigm or a liberal market approach. State-owned enterprises remain dominant in energy sectors, and state investment has driven the dramatic cost reductions that have made Chinese solar and wind manufacturing globally competitive. Yet the expansion of renewable energy capacity has also been accompanied by the emergence of private actors, technology firms, and financial instruments that complicate a simple narrative of top-down planning. The analytical challenge is to understand how these dynamics interact: how state direction creates the conditions for market development, and how market pressures in turn shape the evolution of state priorities. This is not merely a technical question of policy design but a political economy question about the distribution of costs and benefits during a transition that will displace entrenched interests in coal, steel, and heavy manufacturing — sectors that remain politically significant in China's industrial heartland.

The broader regional and international dimensions of China's climate transition connect directly to concerns central to development studies and ODA research. China's Belt and Road Initiative has been a major channel for energy infrastructure investment across Asia, Africa, and Latin America, and the composition of that investment — historically weighted toward coal and fossil fuel projects — has drawn sustained criticism from climate advocates and recipient country civil society organizations alike. However, there is evidence that this profile is shifting, partly in response to external pressure, partly reflecting changing internal economics as renewable costs fall, and partly driven by reputational concerns as China seeks to position itself as a constructive actor in multilateral climate diplomacy. For ODA researchers and practitioners, this shift raises important questions about how Chinese development finance intersects with recipient countries' own climate governance capacities, the role of civil society organizations in holding both donors and governments accountable, and whether the emerging architecture of green finance is genuinely transformative or reproduces familiar patterns of conditionality and dependency in new vocabulary.

From a policy perspective, the implications of China's climate governance model extend to the question of what lessons, if any, are transferable to other developing economies navigating their own transitions. The Chinese experience suggests that market mechanisms alone are insufficient — that the kind of sustained industrial policy, state investment, and long-horizon planning that has driven China's renewable scale-up requires institutional capacities that many lower-income countries lack. This observation should inform how international development organizations, bilateral donors, and multilateral climate funds approach capacity-building assistance. It also raises normative questions about the appropriate role of external actors in shaping the governance of climate transitions in sovereign states — a question that sits at the intersection of ODA policy, political conditionality, and debates about the legitimacy of global climate governance. For researchers at institutions focused on civil society and development, the Chinese case offers a challenging but instructive counterpoint to models that privilege pluralism and civil society participation as prerequisites for effective environmental governance.

Looking forward, several dynamics will determine whether China's climate governance architecture delivers on the country's stated commitments to peak emissions before 2030 and achieve carbon neutrality before 2060. The credibility of these targets depends on institutional follow-through in sectors beyond power generation, particularly heavy industry, transport, and the built environment, where decarbonization pathways are more technically complex and politically contentious. It depends equally on whether the emissions trading scheme is extended and tightened in ways that generate genuine behavioral change rather than functioning primarily as an accounting mechanism. And it depends on the capacity of subnational governance actors to translate national commitments into local implementation under conditions of fiscal constraint and competing development priorities. For the international scholarly and practitioner community, engaging rigorously with the complexity of China's climate governance trajectory — neither as a model to be uncritically replicated nor as an authoritarian aberration to be dismissed — is essential to understanding how the global energy transition will actually unfold in the decades ahead. The Journal of Contemporary Asia's continued attention to this domain reflects its importance as a site where political economy, development studies, and environmental governance intersect in ways that demand sustained, empirically grounded analysis.


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Tommy Keum

Tommy Keum

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Secretary-General, IOCSS Foundation. Researcher in sports philosophy, Korean Peninsula policy, and cultural theory. Founded IOCSS in Seoul in 2023.

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