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Toward a Northeast Asia Carbon Market

Chinese workers ride in a boat through a large floating solar farm project under construction by the Sungrow Power Supply Company on a lake caused by a collapsed and flooded coal mine on June 13, 2017 in Huainan, Anhui province, China. The floating solar field is billed as the largest in the world. (Kevin Frayer/Getty Images)

Climate change is a global challenge that transcends national boundaries. Accelerated sea level rise, intense heat waves, and unpredictable weather patterns are some of the negative impacts of climate change that destroy livelihoods, impede economic progress, and undermine the benefits of sustainable development. Slowing down and ultimately reversing climate change requires limiting anthropogenic greenhouse gas (GHG) emissions of major economies around the world.

Carbon pricing is an essential tool for reducing GHG emissions in a cost-effective way. Over 40 countries and 25 sub-national jurisdictions, accounting for about 25% of global GHG emissions, are using carbon pricing as part of their climate mitigation strategies. The Paris Agreement, adopted in December 2015, seeks to strengthen the global carbon pricing agenda by providing an international framework that supports flexible and nationally determined commitments to reduce GHG emissions. Article 6 of the agreement in particular, lays out the provisions to facilitate voluntary carbon market cooperation across jurisdictions to accelerate the implementation of the nationally determined commitments.

Guided by Article 6 of the Paris Agreement, The Asia Society Policy Institute (ASPI) initiative, "Toward a Northeast Asia Carbon Market" (NEACM), seeks to facilitate carbon market cooperation and deepen the carbon pricing agenda in Northeast Asia by steering timely and pragmatic policy ideas. Northeast Asia accounts for over 30% of global GHG emissions and more than one-fifth of the global economy and therefore, successfully linking these market would substantially impact international climate change mitigation. Additionally, China, Japan, and the Republic of Korea are in formative phases of domestic carbon market development, each pursuing carbon pricing through national and sub-national emissions trading system (ETS). By cooperating on their carbon pricing efforts, these countries can create new opportunities to reduce abatement costs and allow the countries to establish ambitious emissions reduction goals in the future.

Linking markets takes technical expertise, strategic vision, and diplomatic energy. It won’t happen overnight, and requires a series of preliminary steps and pilot initiatives to be successful. Through the NEACM initiative, ASPI is building a stakeholder coalition to lay the foundation on which Northeast Asia carbon market linkage can be built. The initiative’s first policy roundtable was convened on the sidelines of the Global Carbon Expo in May 2016 in partnership with the World Bank Networked Carbon Markets Initiative. The outcome of this dialogue was captured in the ASPI report, Roadmap to a Northeast Asia Carbon Market, which explores leading thoughts on carbon market linkage and argues that carbon market cooperation in Northeast Asia could significantly reduce GHG emissions in the region. In March 2017, ASPI convened a second policy roundtable in Hong Kong, with participation from international and regional policy leaders and carbon market practitioners that yielded a research agenda and helped shape a future action plan.

Through this initiative, ASPI will continue to host policy roundtables, spearhead the formation of a regional carbon market consortium and joint research initiatives, and offer public analysis on the importance of regional carbon pricing cooperation.

Strategic Partner:

Initiative Reports

  • Smoke emitting from chimney stack
    report

    Carbon Market Cooperation in Northeast Asia: Assessing Challenges and Overcoming Barriers

    ASPI report on carbon market cooperation and linkage in Northeast Asia.
  • wind mills
    report

    Northeast Asia Carbon Markets and Trade Connections

    ASPI report outlining ways to foster regional trade and carbon market cooperation between China, Japan, and South Korea.
  • Solar power, Shanghai 8065
    report

    Business Sector Action to Drive Carbon Market Cooperation in Northeast Asia

    ASPI report on how major companies operating in Northeast Asia can drive carbon market cooperation and capitalize on its opportunities.
  • The Network of Smart City, Beijing Central Business District.
    report

    Northeast Asia and the Next Generation of Carbon Market Cooperation

    ASPI report on carbon market developments in China, Japan, and Korea and how linkages can be facilitated between these markets to pursue ambitious climate change policies.
  • report

    Roadmap to a Northeast Asian Carbon Market

    This ASPI report by Jackson Ewing outlines potential for climate change cooperation between China, Japan, and South Korea through market mechanisms.

Related Content

  • Alistair IGC
    speech

    Prospects for International Carbon Market

    Alistair Ritchie delivered a presentation for the 11th International Greenhouse Gas Conference on Prospects for Carbon Markets in 2030.
  • Andy Enero / Flickr

    China’s Emissions Trading System in Context

    Jackson Ewing explains China's nascent emissions scheme in the Harvard report "Market Mechanisms and the Paris Agreement."
  • ASPI Makes the Case for Carbon Market Cooperation in Northeast Asia at Climate Week NYC

    ASPI continued the dialogue on carbon market cooperation in Northeast Asia through series of activities during Climate Week NYC.
  • Chinese workers check solar photovoltaic modules on a hillside in a village in Chuzhou, in eastern China's Anhui province on April 13, 2017. (STR/AFP/Getty Images)

    China’s ETS at Home and Abroad

    ASPI's Jackson Ewing describes China's emissions trading scheme (ETS) which is being launched in late 2017.
  • Ningxia Wind Farm in Northern China (Land Rover Our Planet / Flickr)

    The Asian Carbon Century

    Jackson Ewing shines a light on the climate leaders of the Asia Pacific.
  • The Carbon Pricing Leadership Coalition's second High-Level Assembly in Washington on April 20, 2017. (The World Bank)

    ASPI Partners with the World Bank to Advance Global Carbon Pricing

    Kevin Rudd announces ASPI’s partnership with the Carbon Pricing Leadership Coalition and presents the case for Northeast Asia carbon market cooperation.
  • Surrounded by miners from Rosebud Mining, US President Donald Trump (C) signs the Energy Independence Executive Order at the Environmental Protection Agency (EPA) Headquarters in Washington, DC, March 28, 2017. (Jim Watson/AFP/Getty Images)

    U.S.-China Climate Relations: Beyond Trump

    U.S.-China climate cooperation was short-lived, but Jackson Ewing argues that the fight against climate change will continue despite Donald Trump.
  • Singapore Skyline (Wikimedia Commons)

    Singapore's Groundbreaking Carbon Pricing Scheme

    Jackson Ewing states that the city-state's decision to tax greenhouse gases could serve as a template for the rest of Asia — and beyond.
  • UN Secretary-General Ban Ki-moon speaking at the "High Level Event on Accelerating Climate Action" during the Marrakech climate conference in Morroco on November 17, 2016. (UNclimatechange / Flickr)

    Pricing Carbon at Marrakech: Moving from Principle to Practice

    On 17 November 2016, The Huffington Post published an op-ed by ASPI President Kevin Rudd on how carbon markets are a concrete way to fight climate change.
  • A factory in Xi'an, China. (Alika Seu / Flickr)

    Beating Climate Change Through Innovative Carbon Markets in Northeast Asia

    On 17 October 2016, Brink Asia published a piece by ASPI Director of Asian Sustainability Jackson Ewing on how China, Korea, and Japan can fight climate change by linking their carbon markets.

Testing the basic block

Download the Report

Downloads

  • Policy Roundtable_Carbon Market Cooperation in Northeast Asia.pdf (PDF, 403.09 KB)
  • Building Carbon Market Cooperation in Northeast Asia - Program and Participants.pdf (PDF, 316.56 KB)
  • High-Level Side Event on Carbon Pricing, Paris, December 1, 2015.pdf (PDF, 4.5 MB)
  • White Paper - Building the Evidence Base for Carbon Market Linkage in Northeast Asia.pdf (PDF, 371.68 KB)

Upcoming Events

On the Record

News stories and op-eds relevant to the initiative. 

Related Video

  • Policy

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    A high-level panel discusses how to deploy market tools in combating climate change.
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Past Events

  • Workshop

    Carbon Markets in the Asia-Pacific: Opportunities for Cooperation

    05 Jun 2019
    1 - 8:30 p.m.
    ASPI is collaborating with the International Carbon Action Partnership to convene a workshop on Carbon Markets in Asia-Pacific: Opportunities for Cooperation.
  • Conference

    The Future of Carbon Markets in Major Asian Economies

    10 Dec 2018
    3:30 - 5 p.m.
    Private convening on the sidelines of COP24 in Katowice, Poland.
  • Workshop

    The Future of Carbon Markets in Northeast Asia and Pathways for Cooperation

    18 Apr 2018
    9 a.m. - 4 p.m.
    Closed-door workshop on the design choices of emissions trading systems and next steps to promote carbon market cooperation in Northeast Asia.
  • Panel Discussion

    Northeast Asia and the Next Generation of Carbon Market Cooperation

    14 Dec 2017
    12 - 1 p.m.
    At this ASPI panel discussion and report launch, experts offer perspectives on carbon market developments in Asia and how regional cooperation can influence global climate mitigation efforts.
  • Workshop

    Emissions Trading System Simulation Workshop

    13 Dec 2017
    3:30 - 5:30 p.m.
    A simulation workshop at Asia-Pacific Climate Week on CarbonSim, an application that teaches the principles of emission trading systems (ETS) and brings markets to life.
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