Polllution in Shanghai, China on Dec. 5, 2013. leniners / Flickr

China on Track to Establish Carbon Market as U.S. Withdraws From Climate Stage

China unveiled the details on Tuesday of what is soon to be the world's largest carbon market, two years after China's president Xi announced the initiative.

Although the market launch date wasn't revealed, observers saw today's announcement as a noteworthy step. "This is like the pyramids of Giza for climate policy," Nathaniel Keohane, the vice president of international climate at the Environmental Defense Fund, told ClimateWire.

In its early stages the carbon market will only apply to emissions from power plants producing more than 26,000 tons of carbon per year. This means nearly all of China's power plants, about 1,700 companies, will be included. An estimated 39 percent of China's total emissions come from its coal and natural gas-based electricity sector. From this sector alone, the country's carbon market will quickly outgrow Europe's emissions market—currently the world's biggest.

"It is important to bear in mind that the first phase will be embryonic," Li Shuo, a senior global policy adviser for Greenpeace East Asia, who has been briefed on some details of the plan, told ClimateWire.

Initially, the government is likely to set the cap high. This will allow most power plants to keep emitting as they have been, making emission reductions minimal. A ton of carbon is likely to incur a market cost of around $7.50 (50 yuan), according to a Chinese official who spoke to Quartz on the condition of anonymity. The official went on to say that they expected the price to gradually rise to $45 (300 yuan) per ton of carbon. Every ton of carbon dioxide emitted today will likely cause $125 worth of damage to society in the future, according to economists.

The slow start "is a sign that China is taking this seriously and wants to make sure they're doing it right," Barbara Finamore, a senior attorney and Asia director for the China program at the Natural Resources Defense Council, told ClimateWire.

Market participation will require a rigorous verification process and subsequent monitoring, experts noted. For the first time the Chinese government will be able to take accurate measures from power sector emissions and analyze the data.

"It is precisely the lack of transparency that has worried investors in other Chinese markets, and carbon markets are known for being notoriously tricky," Paul Bledsoe, a former Clinton White House climate adviser, told ClimateWire

Companies are already responding to the initiative. Over the past two years, following president Xi's announcement, a number of industries have jumpstarted preparations for the carbon market. The number of Chinese companies planning for mandatory carbon markets rose from 54 in 2015 to 102 in 2017, Nicolette Bartlett, director of carbon pricing at the environmental charity CDP, told the Financial Times, citing a survey of 336 companies.

The program builds on regional test trading systems that go back to 2011 and have been running since 2013. Those regional programs for other sectors, such as steel and aluminum, will continue until the Chinese government deems they are prepared to enter the carbon market.

China's announcement comes against the backdrop of the U.S. withdrawing from its role as a global leader in climate action. Just yesterday President Trump signed a document that doesn't acknowledge climate change as a real national security threat.

Show Comments ()
Statoil / YouTube

Early April Fool's Joke? Statoil Rebrands Itself as Equinor

By Andy Rowell

First came BP, which went from British Petroleum to Beyond Petroleum. Then Denmark's Dong Energy changed its name to Orsted, to mark its departure from oil and gas. Then earlier this year Shell announced it was morphing from an oil company into an integrated energy company.

And now, the Norwegian company Statoil is proposing to change its name to "Equinor." The rebranding exercise—or what some may call greenwashing exercise—will cost as much as 250 million kroner or $32 million.

Keep reading... Show less

World's First Mass-Market 3D-Printed Electric Car Costs Less Than $10K

The world's first mass-produced 3D-printed electric vehicle could hit the roads by 2019.

Italian startup X Electrical Vehicle (XEV) and Shanghai-based Polymaker, a 3D-printing filament manufacturer, are behind the LSEV—a $9,500 two-seater with a top speed of 42 miles per hour and a range of 93 miles.

Keep reading... Show less
Gage Skidmore / Flickr

Pruitt Sees EPA As Political Stepping Stone

U.S. Environmental Protection Agency (EPA) Chief Scott Pruitt was already voted "worst Trump minion," but, according to reports published last week, Pruitt has his eye on more illustrious titles.

Vanity Fair reported on Wednesday that President Trump was thinking of firing Attorney General Jeff Sessions and replacing him with Pruitt.

Keep reading... Show less
Gogama oil train derailment. CBC / YouTube

Risky Move: Canada Shipping More Tar Sands Oil by Rail

By Justin Mikulka

The Motley Fool has been advising investors on "How to Profit From the Re-Emergence of Canada's Crude-by-Rail Strategy." But what makes transporting Canadian crude oil by rail attractive to investors?

According to the Motley Fool, the reason is "… right now, there is so much excess oil being pumped out of Canada's oil sands that the pipelines simply don't have the capacity to handle it all."

Keep reading... Show less

What Standing Rock Gave the World

By Jenni Monet

At the height of the movement at Standing Rock, Indigenous teens half a world away in Norway were tattooing their young bodies with an image of a black snake. Derived from Lakota prophecy, the creature had come to represent the controversial Dakota Access pipeline for the thousands of water protectors determined to try to stop it.

Keep reading... Show less
Zero Point Zero

Netflix’s 'Rotten' Reveals the Perils of Global Food Production

By Katherine Wei

We all love to eat. And increasingly, our cultural conversation centers around food—the cultivation of refined taste buds, the methods of concocting the most delectable blends of flavors, the ways in which it can influence our health and longevity, and the countless TV shows and books that are borne of people's foodie fascinations. However, there's one aspect we as consumers pay perhaps too little heed: the production of food before it reaches markets and grocery store shelves. We don't directly experience this aspect of food, and as a result, it's shrouded in mystery, and often, confusion.

Keep reading... Show less
About 2,700 square miles of Amazonia's forest is destroyed annually. Dallas Krentzel / Flickr

Earth's Intact Forests Are Invaluable, and in Danger

By Tim Radford

The world's unregarded forests are at risk. Intact forest is now being destroyed at an annual rate that threatens to cancel out any attempts to contain global warming by controlling greenhouse gas emissions, according to a new study.

A second study finds that trees in the tropical regions are dying twice as fast as they did 35 years ago—and human-induced climate change is a factor.

Keep reading... Show less
Modern Event Preparedness / Flickr

5 Billion People Could Have Poor Access to Water by 2050, UN Warns

As the world's population grows and the planet warms, demand for water will rise but the quality and reliability of the supply is expected to deteriorate, the United Nations said Monday in this year's World Water Development Report.

"We need new solutions in managing water resources so as to meet emerging challenges to water security caused by population growth and climate change," said Audrey Azoulay, director-general of the U.N. Educational, Scientific and Cultural Organization (UNESCO), in a statement. "If we do nothing, some five billion people will be living in areas with poor access to water by 2050."

Keep reading... Show less


The best of EcoWatch, right in your inbox. Sign up for our email newsletter!