Changhua Wu: Shenzhen carbon trading launch is a day to remember for China
- 19 June 2013
Changhua Wu is the Greater China Director of The Climate Group. In her Blog, Changhua comments on Chinese climate policy and the growth of clean technologies; in short, sharing China's own Clean Revolution. Here, she comments on the pioneering carbon trading scheme that was launched in Shenzhen yesterday.
A carbon break-through occurred yesterday in China: Shenzhen formally launched its carbon trading program. A wide array of domestic and international media such as CCTV, BBC, Reuters and The Guardian were generous in their coverage of this monumental event. For many, this new carbon trading index represents a breath of fresh air and a sign of better things to come.
Although Shenzhen is just one out of seven Chinese pilots which are due to be launched as part of the scheme, from the start the region has established clear policies around implemeting projects on a step-by-step basis. In particular, Shenzhen has focused on the potential gains from the industrial, buildings and transport sectors. While it is impossible to have total control over emissions initially, it is expected that future growth in carbon emissions will be curtailed -- although will not actually decline.
Today’s trading is open to both businesses and individuals and the start price is 30 Yuan per ton. But the scheme's significance goes far beyond simply carbon reduction. It also critically allows for institution and capacity building, and infrastructure construction.
Terms such as ‘the polluter pays’, ‘ecological compensation’ and ‘emissions trading’, have started to become part of the Chinese policymakers’ vernacular. Carbon trading has been internationally recognized as effective, and if implemented reasonably, it has the potential to stimulate technological growth and attract capital investment. It can teach us how best to consume energy to guarantee national prosperity.
And China, although still in an early stage, is keen to learn. It should use the EU as a case study in carbon emissions trading in an established setting. Recent trends in the EU must be seriously studied though, to avoid repeating the collapse in carbon prices.
Carbon emissions trading will have far-reaching impacts on Chinese society, provided it progresses smoothly. With this new scheme, we can finally begin to reverse the deterioration of the environment.
However, reaching such progress will be tough. Government decision-makers will have to instigate proper carbon management, and they will have to create an environment which is conducive to change. To do this they will need to enhance the public’s understanding of climate change and advance interest in low carbon products.
Local governments must commit to decisions that reduce pollution. They must also internalize the cost of environmentalism so that citizens are not forced to pay.
I believe that this new carbon trading market will cause some initial challenges for localities and businesses. But this is a necessary part of a long journey which will end in wonderful potential. As a result of this scheme, China will become even stronger as an economy.
Congratulations to Shenzhen. It's not long until the other six trading markets follow suit!