Back

Designing a Tradeable Permit System to Control SO2 Emissions in China: Principles and Practice

Denny Ellerman

The Energy Journal, Vol. 23, No. 2, pp. 1-26 (2002).

Denny Ellerman, in The Energy Journal, Vol. 23, No. 2, pp. 1-26 (2002).

This paper discusses the problems of implementing a cap-and-trade system for controlling SO2 emissions in China. It describes the evolution of current air emissions policy for SO2 emissions and focuses on two critical aspects for establishing a tradable permits system in China: the transition from (non-tradeable) facility-specific permits to tradable (emissions) permits and the integration of tradable permits with pre-existing pollution levy system. A major theme throughout the paper is that the requirements for establishing an effective tradable permits system do not differ greatly from those for an equally effective tax or command-and-control regime. Although each instrument has distinctive features, the differences among them are mainly ones of form. All require that the same fundamental problems be solved: How to allocate the cost of burden of reducing emissions, what specific requirements to place on emitting sources, and how to ensure compliance.

For Sponsors Only

As a benefit to our Associates, the latest Working Papers are embargoed for a period of up to six months before becoming accessible to the public. If you are interested in becoming an Associate or learning more about the benefits of sponsorship, please click here.