[JCA] China’s Climate Policy: Transition, Governance, and Market
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Source: Journal of Contemporary Asia | Published: 2026-09-21
Category: 아시아 정치경제 | Keywords: china, governance, policy, transition
China's decarbonization trajectory has become one of the defining variables in global climate governance, and the stakes attached to understanding it have only grown as the world approaches the mid-point between the Paris Agreement's adoption and its 2030 target horizon. As the world's largest emitter of greenhouse gases, the largest manufacturer of solar panels, wind turbines, and batteries, and simultaneously the largest financier of coal-fired power abroad through much of the past decade, China occupies a paradoxical position in the international climate order: it is both the indispensable partner for any credible global mitigation pathway and a persistent source of uncertainty about the pace, sincerity, and governance architecture underpinning its "dual carbon" pledges of peaking emissions before 2030 and achieving carbon neutrality by 2060. It is within this charged context that a study published in the Journal of Contemporary Asia, "China's Climate Policy: Transition, Governance, and Market," takes on particular significance, offering a lens through which scholars of Asian political economy can assess whether China's climate apparatus represents a genuine structural transition or a more contingent, politically managed accommodation between state authority and market mechanisms.
The article's framing around transition, governance, and market signals an analytical approach that resists treating Chinese climate policy as a monolithic top-down command exercise, instead situating it within the layered, often contradictory institutional landscape that characterizes Chinese economic governance more broadly. This is a crucial corrective to simplified Western narratives that alternately depict Beijing as either an authoritarian climate leviathan capable of mobilizing resources at unmatched speed, or as a state whose climate rhetoric is perpetually subordinated to growth imperatives and energy security anxieties. The reality captured in serious scholarship on this subject—and evidently central to this study—is that China's climate governance operates through a hybrid model in which central planning targets embedded in five-year plans are refracted through provincial and municipal implementation regimes, state-owned enterprise incentive structures, and an emerging but still immature national carbon trading market. The tension between administrative fiat and market-based instruments, such as the national Emissions Trading Scheme launched in 2021, is not incidental but constitutive of how Chinese climate policy actually functions, and understanding this tension is essential to assessing the durability of China's commitments.
This scholarship also speaks to a broader pattern visible across Asian political economy: the region's major emerging economies are simultaneously pursuing industrial upgrading, energy security, and climate credibility, often treating these as complementary rather than competing objectives. China's positioning of renewable energy manufacturing—solar, wind, batteries, electric vehicles—as a pillar of industrial policy rather than merely an environmental obligation illustrates how climate transition has been absorbed into the logic of state-led development rather than imposed as an external constraint upon it. This has significant implications for how other developing and middle-income states, many of which are recipients of Chinese overseas investment and, until recently, Belt and Road Initiative-financed energy infrastructure, calibrate their own transition pathways. Beijing's 2021 announcement that it would cease financing new coal power plants abroad marked an inflection point in South-South energy relations, redirecting Chinese overseas capital increasingly toward renewables and grid infrastructure. For institutes such as IOCSS that track ODA, development finance, and civil society dynamics, this shift is consequential: it reshapes the menu of financing options available to recipient governments and alters the leverage that Western donors and multilateral development banks can exercise in green conditionality debates, while also raising governance questions about transparency, debt sustainability, and local civil society participation in Chinese-financed energy projects across Southeast Asia, Africa, and Latin America.
The governance dimension foregrounded in this study also bears directly on questions of civil society space and accountability that are central to IOCSS's broader research agenda. Climate policy implementation in China remains characterized by limited independent monitoring capacity, constrained space for environmental NGOs relative to the early 2010s, and a reliance on internal Communist Party accountability mechanisms—such as cadre evaluation systems tied to emissions and energy intensity targets—rather than external civil society or judicial oversight. This matters comparatively: as many donor and recipient governments in Asia and beyond experiment with blended climate finance, carbon markets, and public-private partnerships for green infrastructure, China's experience offers a cautionary and instructive case about what happens when market instruments are introduced into governance systems with thin independent oversight. The persistent gap between ambitious national targets and uneven provincial compliance, well documented in energy-intensity and dual-control policy cycles, illustrates that market mechanisms alone do not resolve principal-agent problems in multi-level authoritarian governance; they merely relocate them.
From a policy standpoint, the implications extend well beyond China's borders. International climate diplomacy, including the ongoing negotiations around Nationally Determined Contributions updates, Article 6 carbon market linkages, and the EU's Carbon Border Adjustment Mechanism, increasingly depends on credible assessments of whether China's domestic carbon market can mature into a genuine price-discovery mechanism or will remain a politically bounded instrument with limited sectoral coverage and soft enforcement. Multilateral development banks and bilateral donors calibrating their own green ODA strategies toward Asia need a realistic appraisal of China's governance capacity, not merely its stated ambition, in order to assess co-financing risks, alignment possibilities, and the competitive dynamics between Chinese and Western-backed green infrastructure financing in third countries. Researchers examining civil society space in the region should similarly attend to how the shrinking of independent environmental monitoring in China might presage governance patterns in other centralized development states pursuing rapid green industrialization.
Looking forward, the trajectory analyzed in this study will remain a critical bellwether for global climate governance through the remainder of this decade. As China approaches its stated emissions peak and continues to expand both renewable capacity and, controversially, new coal power approvals as a buffer against energy security shocks, the interplay between transition ambition, governance capacity, and market instrument design will determine whether China's climate policy model becomes a template other developing economies emulate or a case study in the limits of state-market hybridity. For practitioners in development finance and civil society organizations, and for scholars of comparative political economy, sustained attention to the institutional texture beneath China's headline climate targets—rather than the targets themselves—will be essential to anticipating how this pivotal case shapes the next phase of global decarbonization efforts.