Enhancing China’s ETS for Carbon Neutrality: Focus on Power Sector

The statement by President Xi Jinping in September 2020 that China will “aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060” sets out a clear vision and timeline for a profound transformation of the country’s socio-economic development. The pace of China’s emissions reduction over the coming decades will be an important factor in global efforts to limit global warming to 1.5°C. The power sector, responsible for nearly half of the country’s energy sector CO2 emissions, is central to achieving China’s stated climate ambition of carbon peaking and carbon neutrality. Accelerating the sector’s decarbonisation requires a well-coordinated policy mix.

The IEA-Tsinghua joint report, Enhancing China’s ETS for Carbon Neutrality: Focus on Power Sector, responds to the Chinese government’s invitation to the IEA to co-operate on carbon emissions trading systems (ETS) and synergies across energy and climate policies. It shows that an enhanced ETS could lead the electricity sector toward an emissions trajectory that is in line with China’s carbon neutrality target. It also explores the interactions and effects of China’s national ETS with its renewable energy policy in the electricity sector, namely renewable portfolio standards (RPS). The report concludes with a series of policy insights to inform China’s climate and energy debate.

The event will be livestreamed in English and Chinese.