National emissions trading rollout tricky, caution analysts

China's enhanced efforts to curb pollution through market mechanisms could risk failure without appropriate emission permit allocation and market liquidity, according to analysts.

Provincial and municipal five-year plans for 2016-20 show that local governments, including Beijing and 11 provinces, are looking to establish market mechanisms for rights transactions including carbon emissions, waste discharge, paid energy use and water resources.

Experts predict that by the end of the 13th Five-Year Plan (2016-20) period, China will be "well-capable" of establishing a national-level trading scheme for all four types of rights transactions. "Establishing a national trading scheme is really a good idea, but it does not help reduce emissions if it fails to attract enterprises to join," said Zhou Dadi, a senior researcher at China Energy Research Society.