[JCA] China’s Climate Policy: Transition, Governance, and Market
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Source: Journal of Contemporary Asia | Published: 2026-10-09
Category: 아시아 정치경제 | Keywords: china, governance, policy, transition
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China's pursuit of carbon neutrality by 2060, formally announced in 2020 and reiterated throughout the 14th Five-Year Plan (2021–2025), has placed the country at the center of global debates over how an authoritarian developmental state manages an energy transition of unprecedented scale. A 2026 article in the Journal of Contemporary Asia, titled "China's Climate Policy: Transition, Governance, and Market," engages precisely this question by examining the interplay of three forces that shape Beijing's climate strategy: the physical and economic transition away from fossil fuels, the governance architecture that coordinates central and local actors, and the market mechanisms—chief among them the national Emissions Trading Scheme (ETS) launched in July 2021—that are meant to price carbon without destabilizing growth. For an institute like IOCSS that tracks the political economy of development across Asia, this framing matters because China's choices on climate governance ripple outward into ODA flows, South-South cooperation commitments, and the Belt and Road Initiative's own green development guidelines issued in 2021 and 2022.
The article's tripartite structure—transition, governance, market—offers a useful analytical lens for understanding why China's climate record is neither a simple success story nor a straightforward failure. The "transition" dimension points to the structural challenge of weaning an economy still reliant on coal-fired power and heavy industry off fossil fuels while sustaining the growth rates that undergird Communist Party legitimacy. The "governance" dimension speaks to the well-documented tension between central mandates—such as the dual carbon targets of peaking emissions before 2030 and achieving neutrality by 2060—and the implementation capacity of provincial and municipal governments, many of which have historically prioritized GDP growth and employment over emissions reduction. The "market" dimension, meanwhile, foregrounds the national ETS, which built on regional pilot carbon markets established in 2013 in Beijing, Shanghai, Guangdong, Shenzhen, Tianjin, Chongqing, and Hubei, and which now covers the power sector as its first phase. By treating these three elements as interdependent rather than sequential, the article situates China's climate policy within the broader literature on state-market hybridity in Asian development states.
This framing connects directly to wider regional and global trends in ODA and political economy that IOCSS monitors. China's domestic carbon market experiment is frequently cited alongside its external climate diplomacy, including its 2021 pledge to stop building new coal-fired power plants abroad—a shift with direct implications for recipient countries across Southeast Asia and Africa that had previously relied on Chinese-financed coal infrastructure under Belt and Road Initiative financing. The governance tensions the article highlights—between central climate ambition and local implementation—mirror patterns observed in other large developing economies where decentralized administrative systems complicate the delivery of nationally determined contributions under the Paris Agreement framework. For researchers tracking civil society space in Asia, the governance question also raises a related concern: in China's top-down climate policy model, there is comparatively limited room for independent environmental civil society organizations to monitor compliance or hold local governments accountable, in contrast to the more pluralistic monitoring ecosystems found in democratic contexts where NGOs and watchdog groups play an auditing role in emissions reporting.
The policy implications of this analysis extend well beyond China's borders. If, as the article's title suggests, China's climate transition depends on the alignment of governance capacity with market instruments, then international development actors—including ODA donors, multilateral development banks, and institutes assessing South-South cooperation—have strong reason to study the National ETS's expansion trajectory as a bellwether for carbon pricing feasibility in other state-led economies. The research significance lies in testing whether China's model of combining administrative targets (the dual carbon goals) with market-based instruments (the ETS) can be decoupled and transplanted, in part or whole, to other large emerging economies pursuing their own energy transitions, such as India, Indonesia, or Vietnam, each of which faces similar tensions between central climate commitments and provincial-level industrial interests. This comparative angle is especially relevant for the Journal of Contemporary Asia's broader editorial focus on political economy across the region, situating the China case as one data point in a larger pattern of state-directed green transitions in Asia.
Looking forward, practitioners and researchers engaging with this literature should watch three concrete markers that the article's own framework implies are worth tracking: the pace at which China's national ETS expands beyond the power sector into cement, steel, and aluminum—sectors long discussed as the scheme's "second phase"; the degree to which provincial governments are held accountable to the 2030 peaking target as the 14th Five-Year Plan cycle closes and the 15th Five-Year Plan is formulated; and the extent to which Beijing's overseas coal moratorium is matched by comparable financing for renewable energy projects in Belt and Road partner countries. For IOCSS's own research agenda on ODA and civil society, the China case also underscores the importance of distinguishing state-led market mechanisms from genuine civil society accountability structures when evaluating the durability and transparency of any country's climate governance claims. As the 2026 publication date of this Journal of Contemporary Asia article suggests, this is an actively evolving research area, and future scholarship will need to track how the transition-governance-market triad holds up as China's carbon market matures and as its climate diplomacy continues to shape development financing patterns across the Global South.