Wednesday, December 20, 2017



Climate change: China gets an ETS

China has introduced an emissions trading scheme for its electricity sector:

The world’s biggest emitter of greenhouse gases, China, has launched the world’s biggest ever mechanism to reduce carbon, in the form of an emissions trading system.

China’s top governmental bodies on Tuesday gave their approval to plans for a carbon trading system that will initially cover the country’s heavily polluting power generation plants, then expand to take in most of the economy.

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Under the trading system, power plants will be issued with allowances to emit a certain amount of carbon dioxide. Plants that manage to undershoot their targets, by cleaning up and becoming more efficient, will be able to sell their excess permits to other generators, which will be expected to seek greater efficiency as an alternative to paying for their emissions.

China’s power sector is responsible for about 3.3billion tonnes of carbon emissions annually, making this potentially one of the world’s most important mechanisms for reducing greenhouse gases.


So, at the minimum, this means that Chinese powerplant emissions will effectively be capped, and will no longer increase. The same will happen to other industrial sectors as the scheme expands. And hopefully, they will then gradually reduce the caps, driving emissions reductions and production efficiency. Unless of course its just cheaper to bribe officials to ignore emissions than it is to reduce them.