The recent report “China’s Carbon Emission Trading: an Experiment to Watch” by the Stockholm Environment Institute provides a positive analysis of China’s pilot for its national-level carbon trading programme.
The biggest carbon producer in the world is the US, followed by China. Getting both of these countries to embrace carbon trading is a tipping point, which will spur huge global investment in green and cleantech industries.
For years China has sat (as has the USA) on the side-lines of the global climate debate. Not for much longer.
According to the report, in announcing the formation of pilot carbon trading programmes China is demonstrating its commitment to a long-term strategy for carbon and energy “intensity” reduction. One of the biggest problems in trying to stem pollution is funding the replacement technologies. A national scheme will reduce the cost and increase the efficiency of efforts to reach carbon and energy intensity goals, with an end game to maintain energy security and reduce domestic vulnerability to the effects of global warming.
The future aim is that the creation of a functional national carbon market in China will - when linked with other major trading schemes such as in the EU - eventually lead to the creation of a global market and price for carbon. The US will have to follow suit and the influx of investment into cleantech will be transformational.
This pilot must succeed. There are always hurdles along the way, but as the report summarises, “China’s determination has served it remarkably well in many other ways in the past decades. That same ‘crossing the river by feeling the stones’ spirit could well enable China to build a unique innovative carbon market that effectively curbs its now soaring emissions.”
Ian Duffy, Head of RSM’s Cleantech and Renewable Energy Group added: “The Chinese initiative is very welcome and the pricing of carbon production worldwide is critical to creating and maintaining a permanent momentum away from fossil fuels and towards renewable and carbon neutral fuels. In the current economic climate, this move shows the importance and priority of shaping future energy generation and consumption.”
This will be fascinating to follow - we’ll be watching closely over the coming years.