CEENRG: No pain, no gain? Simulation of decarbonization potential and socioeconomic effects of voluntary carbon trading mechanism

Speaker: Professor Shaoqing Chen, Professor & Associate Dean, Institute of Carbon Neutrality and Green Development, Sun Yat-sen University | Senior Visiting Scholar, Department of Land Economy, University of Cambridge

Abstract: Voluntary carbon markets have emerged as a pivotal mechanism for incentivizing global emission reduction efforts. We quantify the mitigation potential of China’s dominant voluntary carbon trading mechanisms, covering ongoing major projects in forestry carbon sinks, waste clothing reuse, distributed photovoltaics, and energy-saving devices, along with extended approaches that are anticipated from 2021 to 2060. We show that adopting extended methods would notably augment current mitigation outcomes. While these approaches may lower carbon prices, they can reduce the economic burden on industries compared to the compliance carbon market, without jeopardizing the nation’s carbon neutrality goals. A targeted policy design can further address diverse social needs, delivering co-benefits such as improved public welfare and reduced urban-rural inequality.

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Cambridge Centre for Environment, Energy and Natural Resource Governance (CEENRG) series