Carbon Market has been seen as a tool to help reducing greenhouse gas (GHG) emission in China. With the newest policy been published in 2008, the government department oversees Carbon Market has been switched from National Development and Reform Committee to MEE. Director of MEE, Ganjie Li, said on Mar.11st during a meeting that developing the Carbon Market will be a priority for MEE, and compare to 2015, the carbon emission per unit of GDP has decreased for 45.8%.

China’s carbon market was first initiated back in 2013, and seven pilot regions started carbon trading in 2014. Until the end of 2017, the national market is officially in play with power sector to be the first involved in the market. Although the national market is currently operating, detailed framework and regulations are still under reviewing. In addition, relevant departments are looking at the designing of market management methods, emission report standards and emission auditing methods.

Power sector is among the industries with high GHG emission, therefore, by first involving power sector into the carbon market will set a model for the fully operating market later. However, experts believe that there are things should be watched when developing the power sector carbon market. First is that, regulators should be aware of the different trading polices that used in different regions to avoid unnecessary misinterpretations. Second, regulators in different regions should work with each other to seek the best way to share or transfer any clean energy technology or emission reduction methods.

Third, while running the power sector carbon market, regulators should consider how to eventually manage any secondary market that evolved from the carbon market.

MEE’s responsibilities as Carbon Market overseer are as follow, to draft policy regarding to mitigate climate change and emission reduction, lead the negotiation with foreign organizations and fulfil the nation’s duty in combating the climate change. While MEE is also facing multiple challenges, for instance, how to incorporate market mechanisms with regulations to achieve emission reduction, and how to properly design a management framework to maintain the operation of a public market.