China's "carbon market" takes an important step

China's first mandatory "carbon market" set sail in Shenzhen.

Shenzhen Carbon Emissions Exchange officially launched trading on June 18. 635 industrial enterprises and 200 large public buildings will be included in the pilot carbon emission trading and become the first batch of controlled enterprises. These companies will have a mandatory obligation to control carbon dioxide emissions or face penalties. State-owned oil company PetroChina and China's largest private power generation company Hanergy became the first buyers on June 18 in Shenzhen's carbon emissions market, at a price of 28-30 yuan ($4.57-4.89) per unit of emissions.

According to the current carbon emission quota plan, Shenzhen will basically establish The carbon market for industrial enterprises, the carbon market for construction and the carbon market for transportation have been established, and a comprehensive and multi-level carbon emission control system has been formed, and the overall carbon emission has decreased by about 25%. China has taken an important step on the road of carbon emission control, which has attracted worldwide attention.

Back in 2011, in the tenth annual report of the UK-based Carbon Disclosure Project (CDP), it was found that most companies surveyed regard taking action on climate change as part of their business part of the strategy. More and more large corporations are incorporating this goal into their core business strategies. Boards start to include climate change in their sphere of responsibility, and it becomes a serious business issue.

The reason is that most businesses are driven by commercial interests. Due to rising energy prices, many companies are realizing that they can quickly reduce their GHG emissions in certain areas, and also get a return on investment relatively quickly - about 60% of the emission reduction measures taken by companies can be reduced within 3 years. Get financial rewards.

For example, recently, in a mountainous area in central Sweden, one of the largest onshore wind power projects in Europe is taking shape. The wind farm will generate 90 megawatts of electricity when it is commissioned in 2015, but will supply power to stores owned by Nordic retailer IKEA. IKEA hopes to use all energy from renewable sources by 2020.

IKEA Chief Sustainability Officer Steve Howard believes that reducing IKEA's carbon footprint and securing its own energy supply is not only environmentally responsible, but also reduces costs for the business. “Carbon charges will definitely make a comeback in the next decade, and carbon prices will rise. This is a huge cost to companies. If energy supply is self-sufficient, it can also create a profit center.”

And IKEA Not the only company trying to be self-sufficient in energy. Around the world, many companies are changing their practices to control energy costs. In the past, energy efficiency was only one component of a company's "green agenda," but with rising costs, energy efficiency has risen to become a company-wide issue.

Governments in many countries have also begun to focus on energy efficiency issues, through tax credits, tax incentives and tax rebates to help companies reduce energy consumption, costs and carbon emissions. In order to reduce the huge cost of oil and gas imports, the EU has set itself a goal to increase energy efficiency by 20% by 2020.

The UK government launched a consultation last year on how to reduce electricity consumption. The UK government said that "with the potential to improve energy efficiency realized, the energy savings by 2020 could be equivalent to the output of 22 power plants". In addition, the UK government has simplified its much-maligned carbon trading scheme, the Carbon Reduction Commitment (CRC), which has now been renamed the CRC Energy Efficiency Scheme.

If China can go down the path of limiting its own carbon emissions, it will find it in its own interest to take a small step forward in the world's collective response to climate change.

Because first and foremost, this is in line with other policy priorities of the Chinese government. One of the policy priorities is to wean the Chinese economy away from its reliance on infrastructure, heavy industry and imported resources. Another policy priority is to address China's extremely serious pollution problem. The problem of pollution has negatively affected everything from people's health to politicians' prestige. The situation has led China to impose limits on coal consumption by coal-fired power plants, and new carbon caps could be tied to such limits.

Additionally, China's central role in any global climate agreement means that "recognition" of carbon caps gives China a strong voice in negotiations for the next climate summit (in Paris in 2015) right. China will be in a great position to influence the content of the new agreement, such as how carbon allowances are distributed among countries and how developing countries are compensated.

More importantly, playing a constructive role can change the world's perception of China, and some countries may no longer see China as a prickly emerging power that is unwilling to contribute to the global governance system.

According to authoritative reports, in the United States and Europe, although energy-related carbon emissions have been declining recently, they are still increasing at the global level. Last year, global carbon dioxide emissions from the energy sector rose by 1.4 percent to a record 31.6 billion tons of greenhouse gases, according to IEA estimates. China's carbon dioxide emissions ranks first in the world, accounting for 14% of the world's total carbon dioxide emissions. In 2012, China's carbon emissions rose to 300 million tons.

The world would be less reluctant to accept China's dominance if China had its responsibilities in exercising power. China will gain leverage in setting global standards, whether in emissions reductions or elsewhere. This will be the real gain for China.

Currently, the trading targets of Shenzhen Emissions Exchange are carbon emission allowances and certified emission reductions. Each target has a unique serial number for identification. At this stage, all transactions are spot real-name transactions.

Some experts in the industry have also proposed choosing nuclear energy, implementing extremely strict emission standards for automobiles, home appliances and other machines, establishing a stable global trade mechanism for low-carbon fuels, and developing a variety of technology transfer financing methods, so that the best technology For development around the world, to allow governments to invest in research and early-stage innovation, and to invest in adaptation measures to adapt to the impacts of climate change, etc., to promote the further development of China's carbon market in the future.