The polluter pays. This is the principle behind the emissions market that in 2019 makes its debut in China as well, and will be the largest in the world.
In the fight against climate change, China adds another arrow to its quiver: a new greenhouse gas emissions market. And, true to form, it is setting a new global record: it will be the largest in the world, surpassing even the European Union's in scale. The news was announced on 20 December by the Xinhua news agency.
Read also: Come sarà l'energia del futuro in Italia e nel mondo, tra rinnovabili e stoccaggio
It all began with a pilot phase launched in 2013 across seven pilot cities, including Beijing. Now it has become official: from 2019, the ETS (Emissions Trading Scheme) market will be rolled out at national scale. In this first phase, the emissions market will involve 1,700 power companies, which currently produce more than 3 billion tonnes of CO2 per year — nearly half of all emissions from industry in the Asian giant. Each of them will be assigned a specific greenhouse gas emissions allowance by the authorities: those that exceed it will be able to purchase additional allowances from less polluting companies. This system, based on the "polluter pays" principle, will make it far more cost-effective to retrofit facilities and reduce their environmental impact.
The project is getting off to a reduced start and behind schedule compared with initial forecasts, and to date the Beijing authorities have not announced a start date for trading. What appears confirmed is that 2019 will be a trial period, after which the emissions market will be progressively extended to other sectors. Once full coverage is achieved, 15 per cent of greenhouse gas emissions worldwide will be covered by the Chinese market. In terms of scale, it thus supersedes the historic European Union ETS market, which has been in operation since 2005.
It has been known for years that China is the world's largest emitter of greenhouse gases, and that the first to bear the consequences is the health of its own population. Partly owing to the dramatic U-turn by the United States under Donald Trump, however, the Asian country is pursuing global leadership in clean energy and green technologies. The list of examples that can be cited is by now a lengthy one.
The Beijing government's new five-year plan provides for the halt to construction of around a hundred coal-fired power plants and, conversely, the installation of 130 GW of new renewable energy capacity (primarily solar and wind) by 2020. The target for 2020 is to cover 27 per cent of electricity generation from clean sources; it must be said, however, that coal will continue to play a dominant role in the energy mix for a long time to come. At the same time, the Chinese government has required major car manufacturers to progressively phase out the sale of petrol and diesel vehicles, replacing them from 2019 onwards with electric and plug-in hybrid cars. This energy transition requires colossal investment: it comes as no surprise, therefore, that one in every three green bonds issued in the first half of 2016 was Chinese.
