April 26, 2021 Read More →

China net-zero pledge renews interest in cap-and-trade market

Bloomberg ($):

Qian Guoqiang thought his luck must finally be changing. China’s surprise declaration last year that it would zero out planet-warming carbon dioxide came on the 22nd day of the ninth month. Qian’s office is in No. 922, located on the ninth floor of a skyscraper in Beijing’s Dongcheng district. At long last, he thought, this must mean China would start trading carbon.

For more than 10 years Qian has waited and waited. He quit a government job in 2010 to co-found SinoCarbon, which he envisioned growing into an army of traders and consultants servicing what would inevitably become the world’s biggest carbon market. Back then China had just set targets for reducing its emissions intensity, a measure of pollution as a share of gross domestic product. Qian was convinced one of the next steps would be the creation a national cap-and-trade system to curb pollution. 

And that’s still the plan—it’s just taken far longer than expected. China launched its much-delayed national Emissions Trading System in February, and the first trades are expected to take place mid-year. Citigroup Inc. estimates $800 million worth of credits will be paid for this year, rising to $25 billion by the end of the decade. That would make it about a third the size of Europe’s market, currently the biggest in the world.

At the Earth Day climate summit hosted by the White House this week, Xi said China will start cutting its consumption of coal from 2026. One possible way of driving that shift would be to make power plants pay a steeper price for emitting greenhouse gases.

[Staff Report]

More: One of China’s First Carbon Market Believers Awaits First Trade

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