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The Role of ETS in Achieving Climate Neutrality - A Legal Comparative Study between the EU and China

Shi, Huiyu LU (2024) HARN63 20241
Department of Business Law
Abstract
This thesis explores the role of Emissions Trading Systems (ETS) in achieving climate neutrality, with a focus on a comparative study between the European Union (EU) and China. The background also emphasizes the global climate change issues in the past years and the use of ETS as an effective market-based carbon pricing tool for limiting the emission of greenhouse gases. The aim of this research is to understand the functioning of ETS under various governance structures, legal frameworks, and socio-economic conditions and to offer suggestive lessons for other jurisdictions that may wish to set up ETS and carbon markets that would help them meet their climate objectives. The research questions addressed are: 1) How does ETS operate in... (More)
This thesis explores the role of Emissions Trading Systems (ETS) in achieving climate neutrality, with a focus on a comparative study between the European Union (EU) and China. The background also emphasizes the global climate change issues in the past years and the use of ETS as an effective market-based carbon pricing tool for limiting the emission of greenhouse gases. The aim of this research is to understand the functioning of ETS under various governance structures, legal frameworks, and socio-economic conditions and to offer suggestive lessons for other jurisdictions that may wish to set up ETS and carbon markets that would help them meet their climate objectives. The research questions addressed are: 1) How does ETS operate in different jurisdictions (EU and China) with divergent governance models, legal systems, and cultures? 2) What are the commonalities and differences between the EU and China ETS? 3) How to interpret the differences and comparative analysis of the ETS between the EU and China? The methodology includes legal doctrinal analysis, text analysis, literature review, and comparative methods. The study finds that the EU ETS, as the earliest and most advanced carbon market in the world, features a stringent ‘cap and trade’ structure and market-driven carbon pricing mechanism, while China’s ETS adopts a carbon intensity method and initially covers only the electricity generation sector. Significant differences exist in legislative foundations, development paths, market rules, and maturity stages, rooted in their distinct governance models, energy structures, and stages of economic development. The thesis concludes with key insights into the main characteristics of the EU and China ETS and discusses future challenges, such as the potential impact of the EU’s Carbon Border Adjustment Mechanism (CBAM) on EU-China carbon market cooperation. (Less)
Please use this url to cite or link to this publication:
author
Shi, Huiyu LU
supervisor
organization
course
HARN63 20241
year
type
H1 - Master's Degree (One Year)
subject
keywords
EU ETS, China ETS, climate change, climate policies, carbon market, comparative study
language
English
id
9157064
date added to LUP
2024-06-03 09:43:16
date last changed
2024-06-03 09:43:16
@misc{9157064,
  abstract     = {{This thesis explores the role of Emissions Trading Systems (ETS) in achieving climate neutrality, with a focus on a comparative study between the European Union (EU) and China. The background also emphasizes the global climate change issues in the past years and the use of ETS as an effective market-based carbon pricing tool for limiting the emission of greenhouse gases. The aim of this research is to understand the functioning of ETS under various governance structures, legal frameworks, and socio-economic conditions and to offer suggestive lessons for other jurisdictions that may wish to set up ETS and carbon markets that would help them meet their climate objectives. The research questions addressed are: 1) How does ETS operate in different jurisdictions (EU and China) with divergent governance models, legal systems, and cultures? 2) What are the commonalities and differences between the EU and China ETS? 3) How to interpret the differences and comparative analysis of the ETS between the EU and China? The methodology includes legal doctrinal analysis, text analysis, literature review, and comparative methods. The study finds that the EU ETS, as the earliest and most advanced carbon market in the world, features a stringent ‘cap and trade’ structure and market-driven carbon pricing mechanism, while China’s ETS adopts a carbon intensity method and initially covers only the electricity generation sector. Significant differences exist in legislative foundations, development paths, market rules, and maturity stages, rooted in their distinct governance models, energy structures, and stages of economic development. The thesis concludes with key insights into the main characteristics of the EU and China ETS and discusses future challenges, such as the potential impact of the EU’s Carbon Border Adjustment Mechanism (CBAM) on EU-China carbon market cooperation.}},
  author       = {{Shi, Huiyu}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Role of ETS in Achieving Climate Neutrality - A Legal Comparative Study between the EU and China}},
  year         = {{2024}},
}