Cap-and-Trade Starts in China

This week takes us from the lows to the highs of Chinese environmental policy. Yesterday we reported on the introduction of the death penalty as a possible punishment for polluters. But on the positive side, China’s first carbon market opened this week in Shenzhen. It is one of seven pilot projects set to start this year or next, drawing in 635 local industrial companies and covering over 30 million tons of carbon dioxide, the New York Times reports. Shenzhen and California also announced that they will collaborate to share their cap-and-trade experiences and strategies for market design, Point Carbon reports.

China’s carbon trading will undoubtedly face challenges, as demonstrated by other cap-and-trade programs around the world. In Europe, a glut of allowances has caused record-low prices, and officials continue to haggle over a solution. On Wednesday, MEPs on the environment committee voted to withhold 900 million carbon allowances to be auctioned between 2013 and 2015. The European parliament will vote on the proposal on July 3, Utility Week reports.

And in China, much remains to be done. The country’s emissions totalled about 8 billion tons last year. To tackle that, the country will need a national emissions cap, and it is not yet known how the seven pilots will work together. But this week’s launch is a promising start.

Tamar Wilner is Senior Editor at Environmental Leader PRO.

Picture credit: Discover Shenzhen, via Flickr