As China moves through the process of testing approaches and implementing a national program for regulating carbon emissions, lessons from similar programs elsewhere in the world may prove useful. In particular, such a program requires a robust review to ensure its economic and environmental performance. A successful example of program review can be found in the Regional Greenhouse Gas Initiative (RGGI), and this report examines that processwith an eye to providing useful insights for Chinese policymakers.

The report examines the design and steps of RGGI’s review process in detail, relying on interviews with regulators and other experts. As the interviewees noted, the benefits of the program review include regulatory flexibility, transparency, and the ability to engage stakeholders. For China and other jurisdictions seeking to put carbon regulation in place, an appreciation of the benefits and challenges associated with a formal program review can help policymakers accommodate the uncertainty inherent in regulatory systems and to make valuable adjustments to their greenhouse gas reduction plans when necessary.

Key lessons of the RGGI program review include:

  • The benefit of recognizing and addressing uncertainty;
  • The value of a level of review that goes beyond mere monitoring;
  • Evidence that a broad scope of review can be flexible and effective; and
  • Recognition of the opportunities to educate affected parties in the course of the process.

An earlier edition of this paper looked at the program review process and lessons for other parts of the United States seeking to design programs like RGGI.