Beijing, 16 July 2021 (dpa/MIA) – China launched the world’s largest carbon emissions trading system on Friday as part of the country’s efforts to combat the climate crisis, although critics say it falls short of what is needed.
China said its scheme initially involves 2,000 companies in the energy sector that are collectively responsible for around 4 billion tons of CO2 emissions per year. Other branches of industry are to be added later.
The price for 1 ton of the greenhouse gas was 48 yuan (about 7.40 dollars) at the start of trading in Shanghai on Friday, according to the state news agency Xinhua.
According to the US think tank Rhodium Group, China‘s annual greenhouse gas emissions have recently exceeded the emissions of all developed countries combined.
The trade is intended to help the world’s second-largest economy to reduce its emissions and to achieve the climate targets set by state and party leader Xi Jinping.
He has pledged that China will aim to peak its CO2 emissions before 2030 and achieve carbon neutrality by 2060. This means that no carbon dioxide is emitted or the CO2 emissions are fully offset.
As part of the new trading programme, companies will receive quotas on CO2 emissions, according to Xinhua, and will be able to sell excess emission allowances to those who need to pollute more.
However, experts said that the quotas are allocated extremely generously, which initially creates little incentive to reduce emissions.
China said it wants to ensure that companies get used to the system first, and then it could toughen up the quotas later.
Several cities and provinces had already started emissions trading in pilot projects since 2013.