China has launched a national carbon emissions trading scheme (ETS), expected to be the world’s largest carbon market, to curb climate change effects and to achieve the country’s goals of reaching peak emissions by 2030 and net zero emissions by 2060. 

What is Happening?

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Carbon Trading Gains Momentum

The launch of the National Emissions Trading Scheme comes days after the EU’s sweeping legislations to cut emissions by 55% by 2030 from 1990 levels which include the introduction of a carbon border tax, as well as G20’s endorsement of carbon pricing as a tool to combat climate change. 

Some analysts have suggested that the current national carbon trading scheme is too limited. Due to oversupply combined with the lack of a cap on total emissions, the current trading model could prove to be inefficient in reaching the goal of peaking carbon emissions by 2030 and going net-zero by 2060.