『Abstract
Based on the review of the basic design of the sectoral crediting
mechanism (SCM) - a promising option for developing countries'
emission reduction commitments - this paper analyzes five important
practical issues for China to solve before participating in SCM,
which include (1) difficulties in determining a crediting baseline
(2) the unsolved over-supply problem in the carbon market (3)
the very likely “carbon credits falling short of mitigation costs”
problem (4) the immature market-oriented price system jeopardizing
the success of motivation incentives and (5) inadequate capacity
building. Corresponding suggestions or compromise solutions are
given after a discussion of each issue. It is also recommended
that in order to witness SCM come into being, researchers and
negotiators should endeavor to solve the practical issues that
SCM meets now, bearing in mind the balance of interests of both
developing and developed countries. Finally we believe that SCM's
political barriers can be overcome when technical, economic institutional
and capacity problems are solved.
Keywords: Sectoral crediting mechanism; Practical issues; China』
1. Introduction
2. Review on the basic design of SCM
2.1. Which sectors are eligible to participate in SCM?
2.2. Which type of sectoral crediting baseline is the most feasible
in developing countries? How ambitious should be the baseline?
2.3. How should SCN be implemented within developing countries?
3. Five important practical issues to solve for China to implement
SCM
3.1. Huge difficulties to determine crediting baseline and
the acknowledgement of previous mitigation contributions
3.2. Unresolved over-supply problem in carbon market
3.3. Carbon credits May be far below domestic mitigation costs,
jeopardizing the well-functioning of SCM incentives
3.4. The market-oriented price system in China needs to be consolidated
and strengthened
3.5. Stakeholders need enormous capacity building and the domestic
emission trading scheme needs to be established
4. Conclusions remarks
Acknowledgements
Appendix A. Different institutions' selections of suitable sectors
to participate in sectoral approaches (criteria and results)
Appendix B. Important figures in calculations in Section 3.3
References