Source: Journal of Contemporary Asia | Published: 2026-06-20
Category: 아시아 정치경제 | Keywords: china, governance, policy, transition
The urgency of understanding China's climate policy has never been greater. As the world's largest emitter of greenhouse gases, responsible for approximately 30 percent of global annual carbon dioxide output, China occupies a singular position in the international effort to limit warming to 1.5 degrees Celsius above pre-industrial levels. The country's landmark "dual carbon" pledges — to peak emissions before 2030 and achieve carbon neutrality by 2060 — announced by President Xi Jinping in September 2020, committed China to one of the most ambitious climate trajectories among major economies. Yet the pathway from declared intention to institutional reality has proven neither linear nor uncomplicated. An examination of China's climate governance published in the Journal of Contemporary Asia situates these developments within a broader analytical lens of political economy and institutional transition, asking how a state of China's particular character — authoritarian, developmentalist, and vast in territorial and administrative complexity — navigates the simultaneous imperatives of economic growth, social stability, and decarbonization.
At the center of the article's analytical framework is the question of governance architecture. China's approach to climate policy has never been simply a technocratic exercise in emission accounting; it reflects deep structural choices about the relationship between state authority, market mechanisms, and the role of sub-national actors. The National Emissions Trading System (ETS), officially launched in 2021 and now the world's largest carbon market by covered greenhouse gas volume, exemplifies this complexity. Initially restricted to the power sector and covering approximately 2,500 entities responsible for around 5.2 billion tonnes of CO2 annually, the ETS has operated under an intensity-based benchmarking approach that deliberately avoids setting an absolute cap on total emissions. This design choice is analytically significant: it reflects a governance philosophy that seeks to reduce carbon intensity per unit of economic output without constraining production growth — a formulation that has allowed China to claim progress on decarbonization while sustaining industrial expansion. Critics have long noted that such a design risks creating the illusion of climate ambition without the underlying structural transformation that Paris Agreement commitments actually require. The article engages precisely this tension, interrogating how governance instruments are calibrated not merely to environmental outcomes but to the political economy of development and state-enterprise relations.
The governance framework surrounding China's carbon market reveals a multi-layered institutional architecture that is simultaneously centralized in norm-setting and decentralized in implementation. The Ministry of Ecology and Environment acts as the national competent authority, while provincial-level subsidiaries oversee monitoring, reporting, and verification, and municipal authorities maintain direct regulatory relationships with covered enterprises. This multi-tiered structure generates both adaptive capacity and systemic risk: local governments face competing incentives between meeting economic development targets and enforcing compliance with carbon obligations. The article's analysis of market transition connects to a broader scholarly literature on what some researchers have termed "green authoritarianism" — a governing logic that deploys climate policy not primarily through civil society mobilization or independent regulatory oversight, but through top-down state steering combined with strategic use of market instruments to mobilize private capital. The August 2025 directive issued jointly by the General Office of the Chinese Communist Party Central Committee and the State Council, outlining a roadmap for transitioning from intensity-based to absolute emission caps by 2027 and expanding sectoral coverage to include steel, cement, and aluminum, represents a significant escalation in the ambition of this state-steered market design. If implemented effectively, the ETS would come to cover over 60 percent of China's total CO2 emissions — a coverage ratio that would substantially exceed that of any other existing carbon pricing regime globally.
The significance of China's climate policy trajectory cannot be understood in isolation from the shifting architecture of global trade and carbon governance. The European Union's Carbon Border Adjustment Mechanism (CBAM), phased in during 2023 and entering full force in 2026, has introduced an exogenous incentive structure that is reshaping Chinese industrial and regulatory behavior in ways that no domestic political commitment alone could replicate. CBAM imposes carbon costs on imports from countries with weaker or less transparent carbon pricing systems, directly affecting Chinese exporters in the steel, cement, aluminum, and chemicals sectors. Analysis of expert interviews and official policy documents suggests that Chinese authorities have, in practice, responded to CBAM with considerable pragmatism, allowing local governments and firms to explore compliance pathways while framing the expansion of the national ETS partly as a strategic response to international carbon border measures. This dynamic illustrates a core theme in the political economy of climate governance: that international trade pressures can function as more powerful drivers of domestic institutional reform than domestic environmental advocacy, particularly in systems where civil society organizations have limited independent regulatory voice. The article's engagement with this dynamic offers an important corrective to analyses that treat China's climate commitments as either purely performative or entirely autonomous expressions of national environmental interest, revealing instead a complex strategic interaction between domestic governance imperatives and the evolving norms of the global trading system.
The policy implications of this analysis are consequential for both practitioners and researchers. On the question of market integrity, the current carbon price in China — and indeed across most Asian ETS systems — remains below 20 USD per tonne of CO2 equivalent, a level widely considered insufficient to drive meaningful decarbonization in carbon-intensive industries or to align investment signals with Paris-compatible trajectories. Robust enforcement, greater pricing transparency, and a credible trajectory toward permit auctions and an absolute emission cap are identified as necessary conditions for the ETS to fulfill its transformative potential. The relaunch of China's Certified Emission Reduction (CCER) market in January 2024, alongside the planned expansion of covered sectors from 2027, signals a genuine attempt to deepen market architecture — but the success of these reforms will depend critically on the capacity of provincial enforcement agencies, the independence of third-party verifiers, and the willingness of the central government to allow genuine market discipline to impose costs on high-emitting state enterprises. The State Council's 2025 report on climate actions candidly acknowledged that "balancing development and emissions reduction, coordinating national and local priorities, and reconciling short- and long-term objectives have all become more difficult" — a degree of official candor that itself signals the depth of the governance challenges involved.
Looking forward, the period from 2026 to 2030 will be decisive in determining whether China's climate governance transition constitutes a structural transformation or an elaborately managed performance of ambition. The shift to absolute caps, the integration of major industrial sectors, and the pressure from CBAM and evolving international climate finance standards will together create a stress test for China's governance architecture. For researchers working at the intersection of comparative political economy and climate studies, China represents both a limiting case and a generative one: a state large enough that its choices define the global trajectory, yet distinctive enough in its institutional character that its governance models resist easy transplantation. The Journal of Contemporary Asia has long served as a venue for scholarship that takes Asia's political economies seriously on their own analytical terms, and this article's framing of China's climate policy as a problem of governance, transition, and market design — rather than a simple story of either heroic ambition or cynical greenwashing — advances precisely the kind of nuanced, institutionally grounded analysis that the field requires. For ODA practitioners, international climate finance institutions, and development policy researchers, the lessons are clear: engagement with China's climate transition must be calibrated to the realities of its governance structure, and effective partnerships will require interlocutors who can navigate the boundary between central mandate and local implementation, between market signal and state directive, and between domestic political economy and the emerging global carbon order.