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In recent decades there has been a gradual transformation in environmental policy away from command-and-control policies and toward the use of more flexible, market-based mechanisms. This transformation is evident in the environmental policy of the United States, and the European Union where many scholars and policymakers have accepted the argument that, in comparison with more traditional regulatory approaches, market-centered solutions offer a cheaper and more efficient way to achieve many environmental policy objectives. While market mechanisms may work in certain economies and certain countries, whether they are appropriate for addressing the problem of climate change for countries without an institutionalized domestic market economy, such as China, is still an open question. This report summarizes the discussions, conclusions, and questions posed during The Harvard-Tsinghua Workshop on Market Mechanisms to Achieve a Low-Carbon Future for China. As the report makes clear, most participants believe that market mechanisms have a powerful role to play in achieving a low-carbon future for China. However, considerable differences emerged among the participants regarding the proper design and implementation of market mechanisms, and significant questions remain concerning the proper role of market mechanisms in addressing climate change. This report, and the workshop it summarizes, does not attempt to resolve these differences, but aims to contribute to an ongoing discussion on the future of climate policy in China.
Henry Lee, Sabrina Howell, Scott Moore, and Alice Xia. "Harvard-Tsinghua Workshop on Market Mechanisms to Achieve a Low-Carbon Future for China." Belfer Center for Science and International Affairs, Harvard Kennedy Shool, October 2014.