CHINA: Market-based mechanisms are being used to reduce greenhouse gas emissions in China. The central government’s 12th Five-Year Plan called for emission trading programs. Since 2013, seven carbon trading pilots have been established, while other jurisdictions are creating voluntary programs or scaling up their efforts in expectation of the launch of a nationwide emissions-reduction program in 2016.
Each pilot has different features and levels of ambition, but together they cover jurisdictions representing 25 percent of China’s GDP and make up the second largest emissions trading system in the world after Europe’s. Our study group got to see the diversity of approaches up close.
In Beijing and Shanghai, two of the wealthiest cities in China, carbon markets have been active since 2013. Unlike U.S. goals of reducing emissions in absolute terms, their pilots are designed to reduce emissions intensity. Beijing’s program covers 40 percent of emissions in the city, while Shanghai’s covers 57 percent. Both cities allow offsets, but Beijing requires half of all offsets be located in the city itself.