The visible hand meets the market: assessing China’s two-pronged carbon reduction strategy

2012-2013 E²SHI Seed Grant

Research Team

Carla FreemanAssociate Director of China Studies
Executive Director, The Foreign Policy Institute
School of Advanced International Studies (SAIS)

Bo Kong, former Assistant Professor, Energy Resources and Environment Program, SAIS

China blends state and market in governing its economy. The state plays a significant role in influencing the distribution and use of resources, while the market constitutes a dynamic force in the country’s economic development. The country employs both administrative measures and market-based tools to address policy challenges. As the world’s largest greenhouse gas emitter, how China reduces its carbon footprint not only affects its economic development and competitiveness, but also impacts global efforts to stabilize the climate system.

SAIS researcher Carla Freeman partnered with Bo Kong to investigate how China uses both administrative command-and control measures and market schemes to reduce its carbon dioxide (CO₂) emissions, the primary culprit of human-caused climate change. They are systematically looking at these two distinct approaches on the basis of empirical data gathered, including data from field visits to China’s seven regional pilot carbon trading programs. The research examined the interactions of the two approaches and assessed them against a set of hypothetical relationships as distinct strategies in co-existence.


Raufer, R., Coussy, P., Freeman, C., and Iyer S. (2015) "Emissions Trading." Handbook of Climate Change Mitigation and Adaptation. Springer New York, pp 1-45.

Kong, B. and Freeman, C. (2013). “Making Sense of Carbon Market Development in China.” Carbon and Climate Law Review, 3, pp. 194-212.

Photo credit: Sam Haldane

We are all connected; To each other, biologically. To the earth, chemically. To the rest of the universe atomically.
— Neil deGrasse Tyson