The Impact of Electricity Market and Environmental Regulation on Carbon Capture & Storage (CCS) Development in China

Carbon Capture & Storage (CCS) has been regarded as a significant mitigation strategy to tackle global warming although the uncertainties of carbon price and CCS technology exist. Given that China is the biggest coal consumer and around four fifths of its electricity comes from coal power plants, many think CCS has to plays a central role in cutting the carbon emission of China’s coal power fleet. Most existing researches on CCS development in China emphasize the importance of sufficient funding, technological access, and market readiness, but put little light on the role of environmental regulation and electricity market establishment. This chapter examines the impact of Chinese electricity market establishment and environmental regulatory institution on CCS. This chapter argues that Chinese government should protect Intellectual Property Right (IPR), liberalize electricity market, and enforce environmental regulation in order to harvest CCS benefits successfully.