China Pledges to Enact Cap-and-Trade Carbon Market in 2017
We are living in interesting times.*
I have earlier expressed considerable skepticism with regard to China's supposedly "game-changing" pledges to peak its carbon dioxide emissions by 2030. Perhaps I should ramp down my dubiety a bit. At the U.S.-China Summit, Presidents Xi and Obama issued today a joint statement on climate change in which China announed that it will enact a national emissions trading system in 2017. From the White House press office statement:
China confirmed today that it plans to launch in 2017 a national emission trading system covering power generation, steel, cement, and other key industrial sectors, as well as implement a "green dispatch" system to favor low-carbon sources in the electric grid. These announcements complement the recent finalization of the U.S. Clean Power Plan, which will reduce emissions in the U.S. power sector by 32% by 2030. Both countries are developing new heavy-duty vehicle fuel efficiency standards, to be finalized in 2016 and implemented in 2019. Both countries are also stepping up their work to phase down super-polluting hydrofluorocarbons (HFCs).
Opponents to efforts aimed at cutting U.S. greenhouse gas emissions correctly point out that cuts here alone would have a minimal effect on what is a global problem while giving economic competitors a big advantage. That objection would be significantly blunted if China actually enacts such a program and makes it transparent so that outsiders can monitor its operations. It might also help clear up China's very polluted air. Since it is a single jurisdiction, China might have a better chance than the European Union has had in making a cap-and-trade carbon market effective. Very interesting indeed.
*The so-called Chinese curse is apocryphal.