TITLE:
A Review of Risk and Mitigation Strategies in the Development of China’s Carbon Market
AUTHORS:
Tijiouit Asma, Xinxing Zhou, Xiao Pei
KEYWORDS:
China’s Carbon Market, Risks Type, Price Volatility, Climate Change Mitigation, Policy Recommendations
JOURNAL NAME:
Open Access Library Journal,
Vol.12 No.11,
November
21,
2025
ABSTRACT: The construction and development of a carbon market is vital to the reduction of greenhouse gas emissions and the transition to a green low-carbon economy in China, especially given the country’s long-term target of reaching carbon neutrality by 2060. Moreover, China’s carbon market faces significant challenges ranging from data collection issues and lack of transparency to inconsistency of policies and fragmented regulations. Through a systematic review of 160+ peer-reviewed papers and policy documents (2010-2024), this study identifies three key risk categories and reviews China’s carbon market in the context of the risks to its development and implementation. The review starts with discussing the critical components of risks in China’s carbon market such as price volatility of carbon, the unavailability of comprehensive carbon emissions data and standardized reporting scheme, and the complexity of a national level carbon market integration. It examines the history of the market, how the spread of new information has transformed its current form, and illustrates both the global and local dynamics, particularly regarding the threats of information asymmetry and technology gaps. As well as identifying these challenges, the paper proposes some potential approaches to mitigate the risks to the carbon marketing conclusion, the review identifies numerous recommendations that could enhance the carbon market to ensure it successfully functions and assists in China’s long-term climate change mitigation objectives. Through these solutions in response to the challenges, China can realize the full potential of its carbon market and lead the way toward global climate solutions that other countries would be able to emulate toward low-carbon economic systems.