China gets tough on carbon

China, responsible for about one-quarter of the world’s carbon dioxide emissions, has ambitious goals to reduce them — but has been unwilling to set absolute targets for fear of slowing economic growth. There are now signs that its position is changing.
On 18 June, the country will launch an emissions-trading scheme in the southern city of Shenzhen, marking its first attempt to cut emissions using market mechanisms. Under the scheme, more than 630 industrial and construction companies will be given quotas for how much carbon dioxide they can emit. Companies that pollute more than they are allowed will have to buy credits from cleaner counterparts that reduce emissions below their quota — thereby creating a price for the greenhouse gas.
Another six such cap-and-trade schemes will be rolled out by the end of the year in the cities of Beijing, Tianjin, Shanghai and Chongqing, and the provinces of Guangdong and Hubei. The trial will cover 864 million tonnes of carbon dioxide by 2015 — around 7% of China’s total emissions and about the total amount emitted by Germany each year, according to a report by the London-based analyst firm Bloomberg New Energy Finance. These regional pilot schemes will set the stage for the nationwide carbon market that is scheduled to launch in 2016.
China has committed to cutting its carbon intensity — carbon emissions per unit of gross domestic product — by 40–45% of 2005 levels by 2020, which allows for increases in emissions, although at a slower rate. The initial emissions limits for the regional schemes will be set by applying the carbon-intensity targets to the emissions of individual companies. In 2016, this system will be scaled up nationally, again in line with carbon- intensity targets.