Plans to strengthen China's carbon market

CGTN Europe

CGTN Europe discussed this with Chen Zhibin,  EU-China ETS Policy Dialogue and Cooperation Project expert

Transcript

00:00Now, Chen Jibin is from Adelphi Consults, a European independent think tank for climate development.

00:06He told me where these steps leave China in the global carbon market.

00:12The current system, it requires the intensity.

00:16So, for example, the power sector, they have a benchmark,

00:20and the government will give them free allocation according to this benchmark.

00:24If their intensity is higher than this benchmark, they need to buy allowance.

00:33But if their intensity is lower than the benchmark, they can sell their allowance.

00:39They have surplus, they can sell their allowance.

00:42But it doesn't limit their production.

00:45They can produce as much as they want.

00:47But in the future, when the government set the cap, absolute cap for the industry,

00:53it means they cannot emit more emission.

00:58If they emit more emission, the whole industry needs to pay for that.

01:02So, previously, it encouraged the more advanced one,

01:08more advanced power station or factory, and punish those low efficiency.

01:15But in the future, you put a hard cap on the whole industry.

01:20So, and the cap will be less and less, so the absolute amount of emission will reduce.

01:28So, that's the fundamental change for the whole industry.

01:32So, right now, all the companies, all the factories, they just improve their efficiency.

01:38But in the future, they need to reduce the absolute number of emission.

01:43That's total change.

01:44How are these new guidelines and new steps going to help China's carbon trading system align with other nations,

01:54other trading blocs, for example, the EU?

01:58That's a very good question.

01:59Right now, I'm working on a project to support the carbon market cooperation between EU and China.

02:09So, this is a very important topic in my work.

02:14And as you may know, EU has an absolute cap.

02:18And every year, the cap will reduce.

02:21Right now, we reduce more than 4%.

02:24And in China, when China puts an absolute cap on the ETS, you can compare.

02:33You can see how much the ETS can contribute to China's national target.

02:40And this absolute cap also helps China to align its ETS to its national reduction target.

02:47And in the future, it's, well, it's still far away.

02:54But this, if every system puts an absolute cap, we can clearly see how the world can go to net zero in the mid-century.

03:05Yeah.

03:06Yeah.

03:06So, there's a real global alignment.

03:09China's fully on board.

03:10We also know that China has committed that its emissions will peak by 2030 and then start dropping.

03:19Do these new guidelines and interventions push China closer to that goal?

03:25Yes.

03:27And so, for now, only these four sectors already cover in the China ETS.

03:33It covers 60% of China's emission.

03:36If we're saying by 2027, more sectors will be covered by the national ETS, it may cover more than 70% of China's emission.

Category

Transcript

Be the first to comment

Recommended