China is getting ready to roll out an emissions trading scheme, writes Lu Sun.

Pollution over Shanghai at sunset. Photo: Wikimedia Creative Commons.

The Chinese government has announced its plan to establish a carbon emissions trading system by 2015 — if pilot programs in seven major cities prove successful.

The Department of Climate Change and Energy Efficiency (DCCEE) said the move is a positive for global emissions standards.

“China’s 12th five-year plan signals a move towards sustainable development with the inclusion of greenhouse gas emissions intensity reduction targets and a commitment to gradually introduce market mechanisms,” said a spokesperson from the DCCEE.

Pilot emissions trading schemes are being developed in the cities of Beijing, Chongqing, Shanghai and Tianjin, the provinces of Guangdong and Hubei, and the Shenzhen Special Administrative Region. These seven regions collectively cover 200 million people.

But getting the program off the ground could be difficult, according to a recent report by the Stockholm Environmental Institute (SEI) and FORES Research Foundation in Sweden.

Setting emission caps and allocating permits won’t be easy, the report says, due to “the wide differences in economic structure, growth rates, energy consumption, and carbon intensities across Chinese provinces.”

It further suggests that in order for the program to work, China needs to find ways to measure emissions accurately.

Carbon trade exchanges have been established in most of the pilot cities as a platform to handle the exchange of emissions credits, such as the Shanghai Environment and Energy Exchange and the China Beijing Environment Exchange.

These exchanges are not government owned, but most have government sponsorship as well as backing from other corporations.

Under United Nations negotiations, China has committed to lowering its carbon emissions per unit of gross domestic product by 40 per cent below 2005 levels by the year 2020. This pledge would mean an 11 to 17 per cent reduction in emissions.

At 6.8 tonnes per capita, China’s emissions are five times less than that of an average Australian, however China’s population of 1.3 billion makes the Asian country the largest emitter of carbon pollution.

According to the DCCEE spokesperson, Australia and China have engaged in yearly ministerial dialogues about climate change since 2009.

“Since the announcement of Australia’s Clean Energy Future Plan in July 2011, there have been a large number of policy and technical visits between Australia and China to exchange information on emissions trading policy.

“Emissions trading schemes have operated for years in 31 European countries, New Zealand and several US States.  From 2013 there will be more than 50 national or
sub-national emissions trading schemes around the world, covering more than 850 million people.”

The International Energy Agency estimates that from now until 2030, China will be responsible for half the growth in global energy-related CO2 emissions.

The last three decades have seen rapid economic growth for China and people. But this growth has placed major pressures on the natural environment and availability of resources.

The Stockholm Environmental Institute (SEI) and FORES Research Foundation in Sweden say the superpower’s emission future is of global importance.

“It is therefore an urgent and keen national interest of China to embark on a low-carbon and resource-efficient development pathway.”