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Open Access Publications from the University of California

Pollution Emission Trading: A Possible Solution to China’s Enforcement Obstacles in Fighting Against Air Pollution?


China’s air pollution has become a major environmental concern for the Chinese government and the Chinese public. Although China has established a comprehensive legal framework for environmental protection, many obstacles impede the enforcement of environmental laws and regulations. In light of the Chinese government’s vigorous use of emission trading as a primary means of addressing the environmental problems in recent years, this paper identifies and explains the major economic, legal, political, social, and cultural impediments to enforcing the environmental regulation of China. The paper then engages in a comparative analysis of the emission trading programs of the United States and China, focusing on their different features and varied performance levels in terms of participation and compliance enforcement. The analysis reveals that China’s pollution emission trading programs are simply hybrids of traditional command-and-control and modern market-based approaches to environmental regulation – approaches that have been unable to help resolve long-standing enforcement problems. Nevertheless, such empirical findings do not lead to the conclusion that China should give up emission trading. The study shows that emission trading possesses advantageous features that can help relieve the economic, political, legal, social, and cultural impediments to enforcement faced by China. The paper thus proposes that the Chinese government should undertake further reforms to establish a real market for emission trading.

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