China launches its ‘right to pollute’ market

China launches its 'right to pollute' market

© Provided by Business AM

China will launch its carbon market on February 1, eagerly awaited by environmentalists when the world’s largest polluter has promised to achieve carbon neutrality in 2060.

The Ministry of the Environment published a regulation in early January authorizing the provinces to set greenhouse gas emission quotas for thermal power plants. Energy companies will thus be able to exchange rights to pollute. The objective of the system is to reduce polluting emissions via a gradual increase in the price of CO2.

“This is one of the best news for the world’s largest carbon market,” said Zhang Jianyu, vice president for China of the US environmental association Environmental Defense Fund.

President Xi Jinping drew applause at the end of 2020 by announcing that his country would start reducing its polluting emissions before 2030, to achieve carbon neutrality 30 years later, that is to say absorb as much as to issue some. For the time being, the country is still largely fueled by coal, one of the most harmful energies for the environment. Chinese power plants are 60% coal-fired, and experts expect this powerful lobby group to push for comfortable allowances – and therefore a low carbon price.

Internal exchanges

Under the new rules, the roughly 2,000 power plants that emit more than 26,000 tonnes of greenhouse gases per year will be able to start trading their rights to pollute from February 1.

This national system should eclipse the one set up in 2005 in the European Union to become the first in the world.

China emitted nearly 14 billion tonnes of CO2 in 2019, or 29% of the global total.

Once at full speed, the new system is expected to cover one-third of carbon dioxide emissions in China, according to the International Carbon Action Partnership.

It was not immediately clear whether or not Beijing was considering extending the device beyond the power generation sector.

The post China launches its ‘right to pollute’ market appeared first on Business AM.

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