Last week, China has launched two carbon trading schemes in Beijing and Shanghai. The country, which is a huge contributor to global climate change, plans to reduce its CO2-emissions per unit of GDP by 40% until 2020, based on the year 2005. The new platform, which was developed by taking the European Trading System as a leading example, is supposed to support this goal.
Similar to the EU system, the scheme will force companies to buy credits to cover any CO2 they emit above allocated quotas. Although there are neither binding carbon caps imposed on enterprises, nor any legal means of forcing them to participate, the schemes will function as a learning experience for local firms and governments. As many companies are state-owned, they are expected to fully participate, given the political pressure and their close relation to the local government.
In the first phase, credits will be distributed to member firms free of charge, meaning participants will only face additional costs when exceeding their quotas and having to buy certificates. Until the end of 2014, China plans to launch seven carbon trading schemes in total, including the one already in operation in the Southeastern city of Shenzhen. These pilot projects will help the country in testing policies on emissions markets before the establishment of a nationwide scheme.
Besides reducing emissions, China aims to make local industries more competitive by incentivising the investment in green technologies and climate friendly ways of production. This would lead to the creation of new, green jobs and the development of innovative technologies and products.
TheCompensators* therefore welcome the introduction of emissions trading schemes in China. Even though the systems might not lead to an immediate reduction of CO2-emissions, they will slow down their increase, and by greening the local production they will be a step forward in the transition to a green economy.
The efforts in China and other countries and regions show that the ETS serves as a role model and contributes to climate action beyond Europe’s borders. It is therefore essential that the EU reinforces its climate action efforts and improves the ETS.
By deleting emissions rights with your donation to TheCompensators* you can underline that Europe’s citizens are committed to fighting climate change and modernising their economy.