China is highly known for the amount of carbon emissions that their factories produce each year. They’re one of the biggest polluters when it comes to the amount of greenhouse gases they produce. That’s why National Development and Reform Commission (NDRC) Vice Chairman Zhang Yong announced China’s plans to counter it. The country is aiming to create the world’s largest carbon market, charging each and every polluting company for the problems they cause.
Although carbon markets are not new, with the European Union being the biggest, China’s plans sound a little too ambitious. In perspective, the market will encompass over 1,700 companies in the power sector (over 3 billion metric tons of emissions in total) which will dethrone the European Union’s carbon trading. Although not much of the plan has yet to be made public, China’s goal is to cap its emissions by 2030 while also integrating other sources of power into their grid. The country also has plans to reduce their dependence on fossil fuel with the goal of generating 20% of their energy from cleaner sources.
This huge step is a sign that “a global sustainability revolution is underway,” said Former US Vice President Al Gore in a previous statement. Gore supports The Paris Agreement, which aims to reduce global warming by 2 degrees Celsius, which China is also a part of. The market aims to do a cap-and-trade system where companies with larger emissions purchase allocations from companies who emit less. This encourages said companies to reduce their emissions so they would be able to sell any unused allocations. Any company that reaches 26,000 tons of carbon in a year-to-year basis is automatically included in the market. This threshold might be lowered in the future, according to the NDRC.
There have been other countries who have approached carbon trading, but not all of them are successful. Australia removed their carbon tax last 2014 since it was blamed for the destruction of many jobs. Other countries like the US, South Korea, and New Zealand are also taking part, while studying the backlashes of other countries before them.