Contrasting emission trading in the EU and China: An exploration of the role of the courts

China and the EU have both engaged in formulating climate laws in order to contribute to a global reduction of greenhouse gas emissions. The focus of both is on emission trading. This instrument is designed and implemented according to very different political and legal systems in China and the EU. The rule of law in the EU is understood to mean that access to the judicial system for those affected by the emission-trading scheme is crucial. This can be illustrated by the emergence of a large body of case law on the issue. China, by contrast, is still in the process of building a governance system based on the rule of law, and thereby faces the challenge of setting up a court system that will act independently of a powerful government. While in the EU industries may launch a legal action in order to acquire a more profitable position on the allocation of emission allowances, in China it is still an open question whether industries covered by the emission-trading scheme will be permitted to take their case to court. How does this difference affect the functioning of the instrument in the two jurisdictions? In the EU, so far, the environmental effectiveness of the emission-trading scheme does not appear to have been negatively impacted by court proceedings initiated by indus¬try. While the powerful role of the government in environmental protection in China could be valuable for the achievement of environmental aims, weak judicial control of governmental action could mean either a strict implementation of emission reductions or a lenient approach that tolerates a flexible, less ambitious, implementation.