China wants online trading in its national carbon market to begin before the end of June as it looks for more tools to help cut emissions.
What is Happening?
- According to a statement, Huang Runqiu, the country’s Minister of Ecology and Environment, visited two areas that are playing important roles in setting up the national carbon market, and urged them to finish work in time to meet the target.
- The emissions trading system will first focus on China’s power sector, which represents almost half of the nation’s carbon and 14% of the world’s total, according to BloombergNEF.
- The rules of the national market became official on February 1, but online carbon trading in China has yet to begin.
- Huang visited Hubei, home to the regional carbon exchange that is building the database for the national system, and Shanghai, home to the bourse that will host trading.
- The trading of emissions allowances is a way to use market mechanisms to control and reduce greenhouse gases, and promote green development.
- The beginning of the operation of the market is more urgent now, since September, when President Xi Jinping announced the country’s plan to be carbon neutral by 2060.
- Since October 2011, carbon trading schemes have been implemented in eight jurisdictions across China. The pilot programmes were intended to test how these schemes would work under different conditions. Locations of pilot programmes include Beijing and Shanghai, the heartland of China’s manufacturing industry in Guangdong province and the densely populated industrial municipalities of Tianjin and Chongqing.
- The pilot programmes appear to have been successful in reducing China’s carbon intensity, a measure of emission reductions calculated relative to economic growth and GDP, which fell by 48.1% in 2019 compared to a 2005 baseline. By the end of August 2020, China’s pilot carbon trading markets had a total carbon emission trading quota of 406 million tonnes of carbon dioxide equivalent, equal to around 9.28 trillion Chinese RMB.
- Once implemented, the national carbon trading scheme in China will become the world’s largest carbon trading market.
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