A Flash in the Pan or the Start of Civil Society Participation? Civil Litigation in the Enforcement of China’s Emissions Trading Scheme

A Chinese non-governmental organisation (NGO), supported by other NGO s, filed a civil lawsuit against a non-compliant entity in China’s national greenhouse gas emissions trading scheme (GHG ETS). This action incentivised the non-compliant entity to surrender sufficient allowances and suggests that civil society can play a role in ETS enforcement. From a law and economics perspective, this paper examines the potential role of civil litigation against regulated entities – a typical private enforcement tool – to ensure compliance with China’s ETS. We argue that enforcement by civil society can contribute to ensuring compliance in China’s ETS but faces certain barriers. These barriers include information problems, low chances of success due to limited plaintiff standing, insufficient ETS expertise in NGO s, high court and/or lawyers’ fees, jurisdictional issues, the difficulty of prevailing against state-owned enterprises (SOE s) in litigation, and potentially high litigation costs.