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Fostering unified national carbon market

Author  :       Source  :    Chinese Social Sciences Today     2022-08-05

The market is a scarce resource. Fostering a unified national market, employing the advantages of the super large-scale domestic market, and building a new paradigm of development are critical to China’s economic development.

Future trends

Liu Zhibiao, the director of the Yangtze IDEI at Nanjing University, believes that the market concentration of efficient enterprises in China will become increasingly higher, and the market shares will be concentrated on efficient enterprises. It will be an inevitable trend in the future for enterprises with significant economies of scale to continuously improve their market concentration. And it is important for small and medium-sized enterprises (SMEs) to form a complementary relationship with large enterprises by then. Instead of competing directly with large enterprises, a considerable number of SMEs will be the upstream partners of large enterprises and supply intermediate goods to large enterprises. This dependent and complementary relationship between SMEs and large enterprises will form a modern industrial and supply chain in industrial organization, which may become the direction of China’s industrial development in the future. To facilitate close cooperation between downstream and upstream organizations is one of the directions for China’s future industrial modernization, as it improves the capabilities of basic industries. If the unified market can promote this process, then it is a very important contribution to the modernization of industrial organizations.

Unified carbon market

Zhang Zhongxiang, the director of the Ma Yinchu School of Economics at Tianjin University, said that the national unified market is not a unified market at one stroke, and the construction of a national unified carbon market is a step-by-step process. In the context of accelerating the construction of a national unified market, understanding these issues is crucial to the timely construction and improvement of the national carbon emission trading market as we build China’s carbon market dominated by the national carbon market and supplemented by distinctive regional carbon markets.

Zhang noted that a unified national market means the coordinated development of various related markets. From a national perspective, we should make full use of the opportunity to construct the national carbon market and reform the electricity price mechanism, coordinating development of the carbon market with the electricity market. This also means the continuous improvement and expansion of the construction of the national carbon market. Although the current trading scale is small for the national carbon market, it has sent a carbon price signal throughout society and advocated for market-oriented energy conservation and emission reductions, which is influencing the development and asset management of industries and enterprises.

The national carbon market cannot be achieved overnight. The current national carbon market is indeed a dual track operation for the regional carbon market and the national emissions trading system. When building the national carbon market, it is necessary to seriously consider what local or existing carbon pilots should do next, and how to remain involved and play their role. For instance, local carbon markets can continue to explore and improve mechanism designs. Regional carbon markets can expand to include more industries and emission units.

Editor: Yu Hui

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