China is the world’s biggest emitter of the greenhouse gases that drive climate change and as part of its efforts to decarbonize its economy by 2060, Beijing on Friday released a long-awaited emissions trading system.
The scheme was launched with China, seeking to take a global leadership role on the climate crisis in the lead up to a crucial U.N. summit in November.
China has hailed it as laying the foundations for what would become the world’s biggest carbon trading market, forcing thousands of Chinese companies to cut their pollution or face deep economic hits.
The program was launched just days after the European Union unveiled its detailed plan to achieve carbon neutrality by 2050.
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However deep questions remain over the limited scale and effectiveness of China’s initial emission trading scheme, including the low price placed on pollution.
More broadly, analysts and experts say much more needs to be done if China is to meet its environmental targets, which include reaching peak emissions by 2030.
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China first announced plans for a nationwide carbon market a decade ago, but progress was slowed by the influential coal-industry lobby and policies that prioritized economic growth over the environment.
The scheme will set pollution caps for big-power businesses for the first time and allows firms to buy the right to pollute from others with a lower carbon footprint.
The market will initially cover 2,225 big power producers that generate about a seventh of the global carbon emissions from burning fossil fuels, according to data from the International Energy Agency (IEA).
Those power producers account for 30% of the 13.92 billion tons of Earth warming gases belched out by Chinese factories in 2019.
Citigroup estimates $800 million worth of credits will be bought for this year, rising to $25 billion by the end of the decade.
That would make China’s trading scheme about a third the size of Europe’s market, currently the biggest in the world.
The scheme was originally expected to be far bigger in scope, covering seven sectors including aviation and petrochemicals.
Source: Daily Sabah
