Source: Journal of Contemporary Asia | Published: 2026-07-28
Category: 아시아 정치경제 | Keywords: china, governance, policy, transition
The question of how China manages its climate transition has become one of the defining political-economic puzzles of the twenty-first century. As the world's largest emitter of greenhouse gases and simultaneously its largest installer of renewable energy capacity, China occupies a paradoxical position in global climate governance — both the most consequential obstacle to and the most consequential enabler of meaningful decarbonization. Against a backdrop of intensifying climate diplomacy, the restructuring of global supply chains, and growing geopolitical competition over clean technology standards, scholarly scrutiny of China's domestic climate governance architecture has never been more urgent. The article "China's Climate Policy: Transition, Governance, and Market," published in the Journal of Contemporary Asia, enters this conversation at a critical moment, contributing to a growing literature that seeks to move beyond the binary framing of China as either a climate laggard or a green hegemon, toward a more analytically granular account of how governance structures, institutional incentives, and market mechanisms interact within China's distinctive political economy.
At the core of any serious analysis of China's climate policy is the tension between centralized political ambition and decentralized economic implementation. Beijing has articulated increasingly ambitious climate targets — carbon peaking before 2030 and carbon neutrality by 2060 — and has embedded these commitments into successive five-year plans with notable institutional force. Yet the actual translation of these targets into on-the-ground emissions reductions has been mediated by a complex vertical principal-agent structure in which provincial and local governments retain substantial discretion over energy investment, land use, and industrial permitting. This is not simply a story of implementation failure. It reflects a deeper structural feature of Chinese governance in which local officials face competing incentive systems: national climate mandates on one side, and GDP-linked promotion criteria, local employment pressures, and energy security concerns on the other. The scholarly significance of treating climate policy through the lens of governance — rather than purely environmental science or international relations — lies precisely in illuminating these interior dynamics that aggregate statistics on emissions trajectories cannot capture.
The market dimension of China's climate transition adds further analytical complexity. China launched its national Emissions Trading Scheme (ETS) in 2021, which now constitutes the world's largest carbon market by covered emissions volume. However, the ETS has faced persistent criticism for price volatility, weak price signals relative to abatement costs, free allocation regimes that blunt incentive effects, and the ongoing challenge of integrating a market-based instrument into a state-directed economic system in which major energy sector actors are themselves state-owned enterprises. The relationship between market mechanisms and state governance in China is not one of substitution but of uneasy co-constitution: the state designs, delimits, and continually recalibrates the market. This has significant implications for how analysts interpret the effectiveness of China's carbon pricing regime. Standard economic models that treat a carbon market as a mechanism for efficient price discovery assume a governance context — independent regulatory bodies, transparent firm-level data, credible enforcement — that cannot be taken for granted in the Chinese case. A governance-attentive analysis of the ETS thus reveals not that China's approach is simply inferior to Western models, but that it represents a distinct institutional experiment whose outcomes must be evaluated on their own terms.
From a broader regional and global perspective, the governance architecture China is developing for its domestic climate transition has substantial spillover effects. China's state-directed financing institutions — the China Development Bank, the Export-Import Bank of China, and more recently policy-oriented green finance instruments — have channeled enormous capital flows into clean energy infrastructure across Asia, Africa, and Latin America. The Belt and Road Initiative's evolving green standards, the debate over whether Chinese overseas coal financing has genuinely declined, and the role of Chinese firms in deploying solar and wind capacity across the Global South all represent dimensions of what might be called China's externalized climate governance. For development practitioners and ODA researchers, this raises crucial questions: To what extent do Chinese-financed energy transitions in recipient countries replicate the governance tensions visible domestically? How do recipient governments negotiate the terms of climate-conditioned financing with Chinese counterparts? And how does Chinese climate finance interact with, complement, or compete with OECD-DAC frameworks for green ODA? These questions sit precisely at the intersection of climate governance, development finance, and civil society engagement that institutions like IOCSS are positioned to investigate.
Looking forward, the trajectory of China's climate policy will be shaped by at least three converging forces: the escalating pressure of physical climate risks on Chinese agriculture, water systems, and coastal infrastructure, which increasingly function as domestic political stimuli for more aggressive mitigation; the competitive dynamics of the clean technology sector, where Chinese firms now hold commanding positions in solar manufacturing, battery production, and electric vehicles, creating powerful industrial constituencies for continued green investment; and the shifting terrain of global climate diplomacy, particularly the degree to which US-China relations permit or foreclose the kind of structured engagement that characterized the lead-up to the Paris Agreement. For researchers and practitioners in the fields of ODA, civil society development, and political economy, the Chinese case offers both a cautionary and a generative lesson: climate transition at scale cannot be reduced to a technical or financial problem. It is irreducibly a governance problem, and the institutional arrangements through which states, markets, and civil actors negotiate the terms of decarbonization will ultimately determine whether ambitious targets translate into durable transformation. The Journal of Contemporary Asia's continued attention to these dynamics serves an important function in maintaining scholarly rigor within a policy discourse too often captured by either optimistic technocracy or geopolitical alarm.