Emerging Chinese Emissions Trading Schemes

China is the biggest greenhouse gas (GHG) emitter in the world that is characterized by a rapid increasing per capita emission due to emerging middle class’ consumption. Despite the fast growing of China, this country’s development differs to others developed ones because of the need to increase the poor population’s standard of living. China, in its 12th Five Years Plan, announced not only to reduce its carbon intensity by 40–45% by 2020, but also the introduction of market-based mechanisms through emissions trading schemes (ETS) to achieve this target.  As a result seven (ETS) pilots are in process of consolidation in seven important economies distributed at provincial and city level.  RNK Capital, one of the most important hedge funds and carbon trader in the United States (based in New York), because of its experience in environmental markets in China, is interested about the evolving market opportunities that are arising these ETS pilots and the latter Chinese emission trading national scheme. Therefore, the Capstone team is analyzed the current situation and prospects of these Chinese ETS pilots, emphasizing on the electricity sector effects, and comparing advances to other ongoing ETS markets such as the European Union (EU-ETS) and the California ETS in the United States. Then, the goal was to provide to RNK Capital a situational analysis and perspectives of this emerging ETS markets in China as inputs for exploration and decision-making with regards to the relevance of trading emissions in China.