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China’s national carbon emissions trading market

Topics Covered: Conservation and pollution related issues.

China’s national carbon emissions trading market:


After running pilot projects at the local level for over a decade, China has officially launched its long-awaited national carbon emissions trading market.

  • China’s Emissions Trading Scheme (ETS) has replaced the EU’s as the world’s largest emissions trading system.


What is a carbon market?

  • A carbon market is where greenhouse gas emitters can buy and sell greenhouse gas emissions permits or allowances.
  • Companies that over-performed and have surplus targets in hand will sell them in this market; those polluting will have to buy the surplus to submit their compliance statement.
  • The government sets the cap on the total amount of carbon emissions for the year, then companies receive or buy emissions quotas within the cap.


Who’s involved?

  • In the first phase, the system only covers the power sector. Over 2,000 power companies, emitting more than 4 billion tonnes of greenhouse gases per year or 40 percent of the country’s yearly total, have participated.
  • Seven more high energy-intensive industries, including iron and steel and construction materials, will be covered by the carbon market in the future.


Why build a carbon market?

The country is trying to use the trading scheme to reduce greenhouse gas emissions, as part of its effort to peak its emissions by 2030 and achieve carbon neutrality by 2060.

  • Now, for the first time, the responsibility for controlling greenhouse gas emissions at the national level is left to the enterprises.


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Sources: Down to Earth.