National carbon market coming in 2017
China will launch a national carbon market in 2017, Xie Zhenhua, China's special representative on climate change, told a press conference Wednesday.
China began a pilot carbon trading program in 2011 and there are now seven trading programs in cities such as Beijing and provinces such as South China's Guangdong.
Under these programs, companies that produce more than their share of emissions are allowed to buy unused quotas on the carbon trading market from those that produce less.
Xie said the current pilot programs are going well and the launch of a national market in 2017 is aimed at using a market approach to make the system workable.
The seven pilot programs had traded 40.24 million tons of carbon quotas by the end of August 2015, with the transactions worth a total of 1.2 billion yuan ($185.3 million), according to a report on China's efforts to combat climate change, released in November by the National Development and Reform Commission.
Dimitri de Boer, head of the China Carbon Forum (CCF), a Beijing-based nonprofit organization, said he was excited that China is taking such active steps to bring its carbon emissions under control, and using market-based methods to do it.
At the UN Climate Change Conference in Paris earlier this month, China pledged that its carbon emissions will peak by around 2030.
"It is very important in China for the government to show its determination, as the corporate sector can adapt to these signals pretty quickly," said Bai Yunwen, director of the policy center at Greenovation Hub, a Chinese NGO that focuses on climate change and environmental protection.
The mushrooming of carbon consultation firms lately is an example of firms expanding their activities in this area, Bai told the Global Times Wednesday.
However, a survey by the CCF released in September, which covered professionals at academic and research institutes, in industry and at carbon trading companies, indicated that over 70 percent of the respondents expected a nationwide system of emissions trading would not become fully functional before 2020.
Difficulties
"China should not underestimate how difficult it is to make a good carbon administration scheme. Europe has been trying to do it for more than a decade and it has been quite difficult," de Boer told the Global Times on Wednesday.
China should put significant efforts into building the system, which will be the largest carbon trading scheme in the whole world, he said.
"To trade something you cannot even see or touch, and carbon emissions that haven't been emitted, is quite an abstract concept for many," said de Boer.
He noted that it could take some time before the scheme really works well, especially in less developed regions of China.
There have also been concerns from companies over the transparency of the system, he said.
A national carbon market will probably lead to a rise in investment in companies in the new-energy sectors, as these firms will benefit from ownership of carbon assets that will allow them to secure more loans from banks, Bai said.
Also, mergers and acquisitions in the coal industry, which is suffering widespread losses, will help create larger companies that are more ready to use environmentally friendly facilities and participate in the nation's carbon scheme, Bai noted.
China announced a goal in 2009 of reducing emissions intensity by 40 to 45 percent by 2020, compared with the level in 2005.
Under these programs, companies that produce more than their share of emissions are allowed to buy unused quotas on the carbon trading market from those that produce less.
Xie said the current pilot programs are going well and the launch of a national market in 2017 is aimed at using a market approach to make the system workable.
The seven pilot programs had traded 40.24 million tons of carbon quotas by the end of August 2015, with the transactions worth a total of 1.2 billion yuan ($185.3 million), according to a report on China's efforts to combat climate change, released in November by the National Development and Reform Commission.
Dimitri de Boer, head of the China Carbon Forum (CCF), a Beijing-based nonprofit organization, said he was excited that China is taking such active steps to bring its carbon emissions under control, and using market-based methods to do it.
At the UN Climate Change Conference in Paris earlier this month, China pledged that its carbon emissions will peak by around 2030.
"It is very important in China for the government to show its determination, as the corporate sector can adapt to these signals pretty quickly," said Bai Yunwen, director of the policy center at Greenovation Hub, a Chinese NGO that focuses on climate change and environmental protection.
The mushrooming of carbon consultation firms lately is an example of firms expanding their activities in this area, Bai told the Global Times Wednesday.
However, a survey by the CCF released in September, which covered professionals at academic and research institutes, in industry and at carbon trading companies, indicated that over 70 percent of the respondents expected a nationwide system of emissions trading would not become fully functional before 2020.
Difficulties
"China should not underestimate how difficult it is to make a good carbon administration scheme. Europe has been trying to do it for more than a decade and it has been quite difficult," de Boer told the Global Times on Wednesday.
China should put significant efforts into building the system, which will be the largest carbon trading scheme in the whole world, he said.
"To trade something you cannot even see or touch, and carbon emissions that haven't been emitted, is quite an abstract concept for many," said de Boer.
He noted that it could take some time before the scheme really works well, especially in less developed regions of China.
There have also been concerns from companies over the transparency of the system, he said.
A national carbon market will probably lead to a rise in investment in companies in the new-energy sectors, as these firms will benefit from ownership of carbon assets that will allow them to secure more loans from banks, Bai said.
Also, mergers and acquisitions in the coal industry, which is suffering widespread losses, will help create larger companies that are more ready to use environmentally friendly facilities and participate in the nation's carbon scheme, Bai noted.
China announced a goal in 2009 of reducing emissions intensity by 40 to 45 percent by 2020, compared with the level in 2005.
