Part 3/10:

The current structure of China's ETS is designed with moderation in mind. Emitters are required to cover only the difference between their actual emissions and relatively generous initial benchmarks, reflecting China's cautious approach. This "walk before running" strategy prioritizes stability and manageable change, aligning with China's broader goal of achieving a balance between economic growth and environmental responsibility.

Nonetheless, the modest prices are consistent with China's desire for a more stable, predictable carbon market in the near term, especially given recent global concerns around commodity prices and supply chain pressures. It’s understood that over time, as the market matures, prices may increase, fostering more aggressive emission reductions.