China has detailed plans for the world’s largest emissions trading system covering more than 1,700 power companies and 3 billion tonnes in total greenhouse gas emissions.
The market will be set up to “control and reduce greenhouse gas emissions and promote green low-carbon development,” said National Development and Reform Commission (NDRC) Deputy Director Zhang Yong at a press conference in Beijing.
Trading will begin after a period of “preparatory work” and will “gradually expand market coverage” to include “other high-energy-consuming and high-emission industries,” said Li Gao, Director, Climate Department, NDRC.
The national emissions trading system was approved last week by China’s State Council. Pilot schemes have been set up in seven provinces and cities in China, the first in 2013.
“China joins a growing number of jurisdictions, such as California, the EU and South Korea, which are using market-based measures to cut climate emissions in a cost-effective and efficient way,” said Dirk Forrister, President and CEO of the International Emissions Trading Association, in reaction to the news. “China will have the world’s largest carbon market, drawing lessons from these other markets to ensure that it works in harmony with other national policies. We commend the Chinese government for taking these steps to realize its long-term vision.”
Some 42 national and 25 subnational jurisdictions are pricing carbon. The European Union Emissions Trading System, currently the largest carbon market, covers about 1.75 billion tonnes of emissions.