China plans to roll out the world’s largest carbon market in 2016, according to a senior official with the country’s National Development and Reform Commission (NDRC).
The announcement, which follows the completion of the country’s seven regional pilot carbon markets, is being heralded as a sign that the world’s largest emitter of carbon is getting serious about cleaning up its act.
Sun Cuihua, senior climate official with the National Development and Reform Commission (NDRC) said:
We will send over the national market regulations to the State Council for approval by the end of the year.
Regulations for the new, nationwide carbon trading market are expected to be approved by China’s State Council as soon as the end of the year and are the country’s latest move to cut emissions and tackle climate change.
Currently the world’s largest emitter, China has pledged to reduce the carbon intensity to 40-45% below 2005 levels by 2020.
To meet this goal, China has put a range of policies in place, including cutting coal use, investing in renewable energies, and studying pathways to cap coal use.
According to Reuters, the Chinese carbon market will cap carbon dioxide emissions from sources such as electricity generators and manufacturers. To emit above this cap, organisations must buy permits from the market.
While serious concerns remain relating to the transparency and reliability of this proposed carbon market, it is seen as an encouraging sign that China is moving forward with market-based solutions to reduce emissions and its success in reducing China’s emissions will be crucial to the country’s credibility in international negotiations to combat climate change.
Once the program is fully launched, it will be the biggest market-based mechanism for reducing emissions in the world, dwarfing the European emissions trading system.