China Set to Create World’s Biggest Carbon Market by Mid-2017
China is on track to establish the world’s biggest carbon trading market by mid-2017, further solidifying its position as the world’s pre-eminent climate leader.
“A planned nationwide carbon trading scheme set to be put in place in 2017 is likely to be more than twice the size of the European Union’s Emissions Trading System (ETS),” the world’s largest carbon market so far, Climate News Network reports. “At present, the ETS scheme—which accounts for about 80% of the global carbon market—trades the equivalent of about two billion tonnes of carbon-related allowances each year. But China’s trading system, when it becomes fully operational, is likely to trade between three and five billion tonnes per year.”
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Carbon trading was central to China’s commitments under the Paris Agreement, and in the bilateral climate deal it announced with the United States in 2014, Climate News notes.
Chinese officials also see carbon pricing as a way to address crushing air pollution and resulting health issues in major urban centres.
“China has been running a number of pilot carbon trading systems in cities and provinces, mostly in the country’s industrialized eastern region. Since 2013, the cities of Beijing, Shanghai, Tianjin, Shenzhen, and Guangzhou have been involved in carbon trading, as have the provinces of Guangdong and Hubei,” writes CNN correspondent Kieran Cooke.
“Chinese officials say that, initially, companies in eight sectors of the economy—power generation, petrochemicals, chemicals, building materials, steel, ferrous metals, paper-making, and aviation—will be included in the nation-wide trading program.”