China Partnership for Market Implementation Project

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The China PMI Program will support China’s effort of deepening its carbon pricing instruments including the national carbon market and the voluntary carbon crediting scheme CCER, and of exploring the possibility of including a supplementary carbon tax mechanism. Four components are to be included in the program:Component 1: This component will analyze the role of carbon pricing policy in China’s development policy mix and how the how the carbon pricing policy situates in the “1+N” framework, with the aim to (i) propose changes to sector policies so that carbon pricing can have the desired impact (i.e. price signals can be transmitted to relevant operators); (ii) propose changes to the carbon pricing regulations so that their effectiveness is maximized in the context of the broader policy framework in which they are defined.Component 2: This component will analyze the current operational merits and challenges of the national ETS and CCER, and develop and propose short-, medium-, and long-term integrated roadmaps to enhance of the design and implementation of the national ETS and CCER. This component will also explore the possibility of adopting a carbon tax mechanism with specific considerations on design, implementation, and administration. This component will also provide a strategic assessment on linking with international carbon trading mechanisms.Component 3: This component will analyze the gaps of the current MRV requirements under the national ETS and CCER, and develop and propose measures to enhance the MRV, including proposed revisions to the current technical guidelines. In addition, this component will propose and design accreditation processes for the third-party verifiers under the national ETS, and the validation and verification entities/individuals for the CCER. This component will screen and pilot innovative monitoring technologies, and data quality control and assurance techniques on current data management platforms. Lastly, the component will identify gaps for the current registry and trading infrastructure for the National ETS and CCER and propose improvement measures.Component 4: This component will establish a China PMI Project Steering Committee, composed of MEE, NDRC, MoF, NEA, MIIT, SAMR, National Certification and Accreditation Administration, and other relevant agencies. Project consultation as described for each of the activities in Components 1 through 3 will be planned and decision made by the Project Steering Committee. This component will also establish a Project Expert Committee (where experts will be procured as individual consultants) to support and advise on technical matters. The relevant project manage tasks are also carried out under this component.