China Is Preparing to Launch the World’s Biggest Carbon Market

2017-08-15

Excerpt:

As the United States reverses its climate policies, the world’s top greenhouse gas emitter is in the midst of setting up a national carbon-trading system.

Chinese officials are preparing to launch an emissions market later this year that will cover roughly a quarter of the country’s industrial CO². Officials and nonprofit groups from the European Union, Australia and California have been advising the Chinese on their program design.

Expectations are tempered: Details of China’s national system are still murky, but enough information has emerged that observers are skeptical it will be immediately comparable to existing programs, due to design features as well as the haste with which China is rolling it out.

The National Development and Reform Commission, China’s macroeconomic planning agency, has said it intends to start a nationwide market in November. But it’s not clear what that exactly means—whether businesses will have to immediately start buying carbon allowances to cover their emissions, or some lesser form of regulation, like requiring companies to report their emissions. So far, observers say the market falls short of standards set by Western jurisdictions.