July 14th, 2012 | Shanghai Daily Call for carbon emissions trading scheme
AS China’s GDP soars (despite a current slowdown due to reduced orders), its energy consumption as well as the emissions of carbon dioxide are increasing rapidly.
Simply relying on traditional administrative controls can no longer fulfill the promise to reduce emissions. So we must find some new, efficient reduction methods.
Carbon emissions trading has been acknowledged as a good option.
Compared with other methods, this scheme is a market method, which can reduce the marginal costs and fees of greenhouse gas emissions by a wide margin.
Carbon emissions trading treats carbon credits as merchandise that can be bought and sold. Surplus or shortage of credits can be adjusted through transactions in the carbon credit market.
Since it’s a market, there will be a main body of transaction. From 2012-15, the National Development and Reform Commission approved Shanghai and seven provinces to carry out pilot projects, which would then be expanded to the whole country.
Our country is still engaged in production and manufacturing. The level of energy consumption of these producing industries is much higher than in developed countries.
But the carbon dioxide emissions per capita from living consumption is far below the level of developed countries. And the carbon emissions from daily living have a wide range of sources, which makes it difficult to include in a carbon trading scheme.
Moreover, it’s hard to consider the construction industry, a secondary industry, and the transport industry, a tertiary industry, as part of a trading scheme because both are closely related with people’s livelihood, and also with a wide range of carbon emissions.
Currently, China joins the international carbon market mostly through CDM (Clean Development Mechanism) trade, that is to say developed countries invest in clean energy projects in developing countries, to get a carbon reduction credit.
However, because of our own lack of a trading mechanism and platform, China always remains at the low end of the international carbon trading chain, without pricing power, hence, international traders can easily force down prices.
It is imperative for China to establish a national carbon emissions trading market and then to join the international efforts.
The author is an associate professor at the UNEP-Tongji Institute of Evironment for Sustainable Development, Tongji University.
By Liao Zhenliang