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Government Supervision and Control Mechanisms for the Carbon Market in China: A Principal-Agent Perspective

Published online by Cambridge University Press:  16 October 2025

Xin Xu ,
Jinsong Deng  and
Geoffrey C. Chen Open the ORCID record for Geoffrey C. Chen [Opens in a new window]
Xin Xu
Affiliation:
College of Environmental and Resource Sciences, Zhejiang University, Hangzhou, China Zhejiang Ecological Civilization Academy, Huzhou, Zhejiang, China
Jinsong Deng*
Affiliation:
College of Environmental and Resource Sciences, Zhejiang University, Hangzhou, China
Geoffrey C. Chen
Affiliation:
Department of China Studies and University Centre for Culture, Communication and Society, Xi’an Jiaotong-Liverpool University, Suzhou, Jiangsu, China
*
Corresponding author: Jinsong Deng; Email: jsong_deng@zju.edu.cn
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Abstract

Drawing on semi-structured interviews with 36 policymakers, experts and scholars, this paper employs a principal-agent framework to analyse China’s carbon market governance. The findings reveal that institutional misalignment between central and local priorities undermines market efficacy. While mechanisms like the Target Responsibility System (TRS) and environmental inspections aim to enforce compliance, fragmented incentives and passive central supervision exacerbate policy incoherence. Owing to competing mandates, local governments prioritize short-term GDP growth over the development of the carbon market, thereby relegating emissions trading to a peripheral status. State-owned enterprises (SOEs) dominate market participation, fulfilling compliance through political alignment but distorting price signals and marginalizing private actors. China’s hybrid governance model, which combines top-down controls with decentralized experimentation, generates systemic contradictions where weak enforcement, ritualistic compliance and data opacity persist as the dominance of SOEs colludes with local developmentalism to weaken carbon pricing. Overall, carbon market governance mechanisms have paradoxically incentivized regulated entities to prioritize developmental goals over improving carbon market infrastructure.

摘要

摘要

本研究采用委托-代理理论框架, 通过对36位中国碳市场政策制定者、专家和学者的半结构化访谈, 系统分析了中国碳市场治理体系。研究发现, 中央与地方目标间的制度性错位显著削弱了市场效能。尽管目标责任制和环保督察等机制旨在强化政策执行, 但激励结构碎片化与中央监管的被动性加剧了政策不协调。由于多重任务竞争, 地方政府倾向于将短期GDP增长置于碳市场建设之上, 导致排放权交易制度被边缘化。国有企业在市场中占据主导地位, 其通过政治性服从完成合规要求的行为扭曲了价格信号, 并压缩了私营主体的参与空间。中国 “顶层控制-地方试验” 的混合治理模式产生了系统性矛盾: 在国有企业主导地位与地方发展主义共谋下, 监管乏力、合规形式化和数据不透明等问题持续存在, 弱化了碳定价机制的作用。总体而言, 现行碳市场治理机制反而激励被规制主体将发展目标置于市场基础设施完善之上, 形成制度悖论。

Keywords

carbon marketcentral–local relationsenvironmental governanceprincipal-agent relationshipstate control碳市场中央-地方关系环境治理委托代理理论国家控制

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Type
Research Article
Information
The China Quarterly , First View , pp. 1 - 19
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Copyright
© The Author(s), 2025. Published by Cambridge University Press on behalf of SOAS University of London.

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