Carbon trading program could give China pricing power
In 2019, 44.59 million kilowatt-hours of electricity were injected into the grid, theoretically eliminating around 44,500 tonnes of carbon emissions. Photo: cnsphoto
With China’s nationwide carbon trading program ready to start by the end of June, domestic and foreign experts place high hopes on China’s role in achieving carbon neutrality around the world. China is also expected to gain strong pricing power, given its unprecedented efforts to cut carbon emissions, experts said on Sunday.
“Carbon could become a new currency, with China creating the conditions, standards and prices,” Deborah Lehr, vice president and executive director of the Paulson Institute, said at the spring meetings of the International Finance Forum 2021 held Sunday in Beijing by video.
China will be at the heart of the climate-related business boom, not only because the scale of its emissions create opportunities, but also because it is becoming a leader in innovative green finance as well as green technologies, he said. she declared.
Goldman Sachs has estimated that there is a $ 16 trillion cleantech infrastructure investment opportunity in China’s potential path to net zero by 2060. This could create up to $ 40 million. jobs and stimulate economic growth.
China has started to open up more to foreign companies in the field of environmental goods and services, and the launch of China’s carbon exchange will also create new opportunities, according to Lehr.
The country’s nationwide carbon emissions trading system will be launched by the end of June as scheduled, Liu Youbin, spokesperson for the Ministry of Ecology and Environment, said on Wednesday. Environment, during a press conference.
The volume of carbon emissions covered by the commercial market will reach more than 4 billion tons, making it the largest carbon emissions trading market in the world, Liu said.
Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Sunday that if China had the power to price carbon emissions, it would better adapt to national economic development while contributing to its ambitious goal of net zero emissions by 2060..
In order to improve its pricing power, China must do more to encourage domestic companies to reduce their carbon emissions in order to increase the country’s share in global carbon emissions trading, Xi said.
Meanwhile, China should open up the carbon emissions trading system to foreign institutions and connect international and domestic markets through carbon emissions derivatives, he said.
Zhou Xiaoquan, chairman of the Shanghai United Assets and Equity Exchange, said Friday at a forum in Shanghai that the exchange, along with the Shanghai Environmental and Energy Exchange – which is responsible for building the trading system – and other financial institutions, will operate. establish a multi-faceted carbon finance marketplace in Shanghai to make the city a carbon trading pricing hub with international influence.
National financial institutions will offer new activities such as carbon emissions buybacks and financial derivatives in the carbon trading market, while releasing a national carbon market price index at the appropriate time, has t -he declares.