China to create carbon market to reduce greenhouse gas emissions

Sep 10, 2014 12:00 AM

China announced plans to roll out a national carbon-permit market in 2016 in an effort to reduce its carbon emissions. The market would be the largest of its type in the world.

As of 2011, China led the world in emitting carbon dioxide, pumping out 28 percent of the global total, according to the World Resources Institute. (The United States came in second, at 16.5 percent.) But the country has pledged to reduce its emissions, per unit of GDP, to between 40 and 45 percent below its 2005 levels by the end of this decade. To that end, it’s already operating seven regional carbon trading markets.

In a carbon market, regulators set an overall cap on the amount of carbon dioxide emissions, according to Business Spectator, issuing permits to companies that emit. If a company needs to emit more than it is permitted to, it can buy permits from companies that have reduced their emissions. As the overall cap decreases over time, so too do the carbon emissions.

There are 46 such markets operating globally, including China, Business Spectator reports. The European Union’s is the largest, but China’s market would “dwarf” that system. More markets are coming in South Korea, Indonesia, Thailand and Vietnam, all with the aim of regulating carbon emissions to reduce environmental harm.

A high-level Chinese advisor first announced the plan in June to some skepticism, according to The Guardian, a day after the Obama administration announced new rules to cut carbon pollution from power plants by 30 percent. The United States has no carbon cap or trading market.

China’s state-owned news agency Xinhua reported today that the country’s carbon emissions dropped by 5 percent in the first half of this year, the “largest drop in many years.” Li Keqiang, the head of China’s government, said the country has “declared war on pollution.”

Even as countries reduce their emissions, greenhouse gases remain in the atmosphere, having continued effects on the planet’s climate.

Concentrations of greenhouse gases in the planet’s atmosphere surged to a record high in 2013, according to a new report from the World Meteorological Organization.

Carbon dioxide levels reached 142 percent of pre-Industrial Revolution levels, while methane and nitrous oxide hit 253 percent and 121 percent, respectively.

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