Country’s seventh carbon market could lay foundations for national ETS by 2018
As with many major Chinese cities, Chongqing’s residents have to cope with severe levels of air pollution (Pic: Laiwan Ng/Flickr)
By Ed King
The Chinese city of Chongqing will become the latest region to launch an emissions trading scheme on June 13, RTCC understands.
This will be the seventh and final pilot ETS set up by the government in the last year, with a national market scheduled for 2018.
The south western city of Chongqing is responsible for 1.76% China’s emissions, and hosts heavy polluting industries including aluminium, cement and steel factories.
Around 240 firms with annual emissions beyond 20,000 tonnes of carbon dioxide are likely to be affected.
Cao Zhu, a manager with the Chongqing Carbon Trade Centre, told Reuters news agency the initial price for a tonne of carbon will be $4.80.
Changhua Wu, a specialist on China’s climate policy with the Climate Group, said the main significance of the Chongqing scheme was the building of an carbon inventory for the sprawling city and its industrial hinterland.
“This is invaluable experience in designing a national scheme,” she said.
Seven official ETS pilot programs, in Beijing, Shanghai, Tianjin, Chongqing, Guangdong, Hubei and Shenzhen have opened since last year, covering around 18% of the country’s emissions.
Hubei officially launched the sixth scheme last month.
According to World Bank data, the 2013 allocations of these pilots combined amounts to 1.115 billion tonnes of carbon dioxide equivalent (annually), making China the second largest carbon market in the world, after the EU’s trading scheme.
As RTCC revealed last week, China expects to launch a national carbon market in 2018, based on regional schemes it is presently piloting.
A leading Chinese climate official this week hinted the world’s biggest CO2 emitter could accelerate its carbon cutting plans by imposing an absolute carbon cap by 2016.
This could be a key part of the country’s next five-year plan, due to be published in 2015.
No indication has been given on what level of cap China may impose. The country’s emissions have soared by 50% since 2005.