China's carbon emissions trading initiative will be instrumental in reducing carbon emissions andfostering the creation of renewable energy sources in the nation, while contributing to global efforts to tackle climate change, a top Chinese official said.
The Chinese carbon market development has been healthy over the past two years, according to Pan Hao, the head of SPIC Carbon Asset Management Co Ltd, a subsidiary of State Power Investment Corp. China's carbon market development has been healthy, according to benchmarks like China's goal of peaking carbon emissions by 2030.
The government has been actively incorporating carbon market development into the great effort of building a new power system with new energy as the main pillar, Pan said, facilitating increased investment in renewable and clean energy.
While some consider China's carbon emissions trading program, which is the world's largest of its kind, to be relatively quiet since its soft launch in 2021, Pan sought to offer a proper perspective, saying that a carbon market is a gradual process that cannot be rushed or hurried, considering the country's substantial emissions trading volume.
The carbon market has immense market prospects and potential for relevant industries' transformation to a green and low-carbon development model, and it is necessary for leading enterprises in the market like SPIC to provide solid guidance and support for future market participants for long-term healthy development, Pan said.
The carbon market's primary objective is not to profit from the financial market but instead to slowly decrease emissions by better utilizing the policy instrument of quotas, encouraging companies to adjust their development model and implement high energy efficiency and low-carbon technologies. Companies that can be examples can be helpful to guide future participants in fulfilling their responsibilities effectively. SPIC is ready to support different industries in achieving green and low-carbon transformations through carbon footprint management and related businesses, providing professional support for the sustainable development of enterprises, he said.
Liu Yang, an expert partner at Bain Co, said more efforts are expected to guide companies from various sectors to participate voluntarily in the carbon market and invest in the market to scale up climate action globally.
China is aiming to reintroduce the China Certified Emission Reduction Program by the end of the year. The program is a voluntary way to get carbon credits to trade. The basic infrastructure required to launch the program is already largely in place, the ministry of ecology and environment said.
Liu Youbin, ministry's spokesman, said in a statement in June that the government will strive to launch the CCER program-linked trading market this year and maintain market integrity, fairness and transparency.
The CCER program enables companies to earn carbon credits voluntarily by taking action to reduce carbon emissions, such as promoting renewable energy generation and afforestation.
The program was launched in 2015 by the National Development and Reform Commission, and has since been suspended in 2017 by the National Development and Reform Commission.
China's carbon market is anticipated to expand beyond power generation, into seven new, harder-to-abate sectors, including petrochemicals, chemicals, building materials, steel, and nonferrous sectors, in order to achieve the national objectives of peaking emissions by 2030 and reaching carbon neutrality by 2060.
8 Comments
Comandante
The post does not provide a clear roadmap or strategy for the future of the carbon market in China. Without a comprehensive plan, it is difficult to assess the long-term viability and effectiveness of the scheme.
Loubianka
The post highlights that the carbon market is a voluntary mechanism, which allows companies to choose to participate and earn carbon credits. This provides flexibility and allows companies to take responsibility for their carbon emissions at their own pace.
Katchuka
The post highlights that the carbon market in China is expected to expand into new sectors, including petrochemicals, chemicals, building materials, steel, and nonferrous sectors. This broadens the scope of the market and increases its potential impact.
BuggaBoom
The post does not address the potential economic implications of the carbon market. It is important to consider the impact on industries and job creation, as well as any potential disparities between different regions or sectors.
Katchuka
The post acknowledges that the establishment of a carbon market is a gradual process, but this raises concerns about the urgency of addressing climate change. Given the substantial emissions trading volume in China, a more urgent and ambitious approach may be necessary.
Muchacha
The expansion of the carbon market to new sectors is a positive step, but it may not be enough to achieve China's national goals of peaking emissions by 2030 and reaching carbon neutrality by 2060. More ambitious measures and targets may be necessary.
Mariposa
As the world's largest carbon market, China's emissions trading scheme has the potential to make a significant impact on global carbon emissions. By incentivizing companies to reduce their emissions, the scheme can contribute to the overall goal of combating climate change.
Korsika
Without strong enforcement mechanisms, the carbon market may struggle to effectively reduce emissions. It is unclear how the government plans to ensure compliance and punish companies that exceed their emissions quotas.