China Starts Carbon Trading Scheme
Part of: GS Prelims and GS -II – International relations and GS – III – Climate change
In news China recently introduced its long-awaited emissions trading system.
- It is a system that would create the world’s largest carbon market and double the share of global emissions covered under such programs.
What are the features of the carbon trading scheme?
- The carbon market will help the country lower greenhouse-gas emissions.
- It will help China achieve its goal of reaching peak emissions before 2030 and carbon neutrality, or net zero emissions, by 2060.
- The program will initially involve such 2,225 companies in the power sector which are responsible for a seventh of global carbon emissions from fossil-fuel combustion
- Under the trading program, emitters such as power plants and factories are given a fixed amount of carbon they are allowed to release a year. They can in turn buy or sell those allowances. That pushes emitters to think of controlling and reducing emissions in terms of a market.
- Over the next three to five years, the market is set to expand to seven additional high-emissions industries: petrochemicals, chemicals, building materials, iron and steel, nonferrous metals, paper, and domestic aviation.
- Rather than be subject to the absolute caps on emissions in other trading programs, Chinese companies will start off with allowances that use benchmarks based on previous years’ performances which can be traded by negotiation or auction.
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News Source: TH