{"id":29540,"date":"2024-09-16T18:32:04","date_gmt":"2024-09-16T13:02:04","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=29540"},"modified":"2024-09-16T18:32:06","modified_gmt":"2024-09-16T13:02:06","slug":"chinas-carbon-market","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/16-09-2024\/chinas-carbon-market","title":{"rendered":"China\u2019s Carbon Market"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Environment and Conservation<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>China is seeking public feedback on a<strong> plan to include cement, steel, and aluminium production <\/strong>in its <strong>carbon emissions trading scheme (ETS)<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>China\u2019s Carbon Market<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>China\u2019s carbon market consists of a <strong>mandatory emission trading system (ETS)<\/strong> and a voluntary greenhouse gas (GHG) emissions reduction trading market, also known as the <strong>China Certified Emission Reduction (CCER) scheme.<\/strong><\/li>\n\n\n\n<li>The ETS will eventually include <strong>eight major emitting sectors<\/strong> including power generation, steel, building materials, non-ferrous metals, petrochemicals, chemicals, paper and civil aviation, which together account for <strong>75% of China\u2019s total emissions.<\/strong><\/li>\n\n\n\n<li>The two schemes operate independently but are interconnected via a mechanism that allows firms to <strong>buy CCERs on the voluntary market to meet their compliance targets under the ETS.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is the Emission Trading System?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ETS started trading in <strong>2021 <\/strong>on the<strong> Shanghai Environment and Energy Exchange.<\/strong>\u00a0<\/li>\n\n\n\n<li>Under the scheme, firms are granted a <strong>quota <\/strong>of<strong> free certified emission allowances (CEAs).\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>If actual emissions exceed a company\u2019s quota during a given compliance period, it must<strong> buy more allowances<\/strong> from the market to cover the gap. If its emissions are lower<strong>, it can sell its surplus CEAs.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Allocations are decided not by absolute emission levels, but by <strong>industry carbon intensity benchmarks set by the government,<\/strong> which are reduced over time.\n<ul class=\"wp-block-list\">\n<li>Emitters are obliged to submit key parameters on a monthly basis and report emission data every year.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Since its inception, it has become the <strong>world\u2019s largest emissions trading platform, <\/strong>covering about 5.1 billion tons of carbon dioxide equivalent, around <strong>40% of China\u2019s total.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Carbon Markets<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Carbon markets are <strong>trading systems <\/strong>in which <strong>carbon credits are sold and bought.\u00a0<\/strong><\/li>\n\n\n\n<li>Companies or individuals can use carbon markets to<strong> compensate for their greenhouse gas emissions<\/strong> by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions.<\/li>\n\n\n\n<li><strong>One tradable carbon credit equals one tonne of carbon dioxide <\/strong>or the equivalent amount of a different greenhouse gas reduced, sequestered or avoided.\u00a0<\/li>\n\n\n\n<li>When a credit is used to reduce, sequester, or avoid emissions, <strong>it becomes an offset and is no longer tradable.<\/strong><\/li>\n\n\n\n<li>There are broadly<strong> two types of carbon markets: compliance and voluntary.\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Compliance markets<\/strong> are created as a result of any national, regional and\/or international policy or regulatory requirement.<\/li>\n\n\n\n<li><strong>Voluntary carbon markets \u2013 <\/strong>national and international \u2013 refer to the issuance, buying and selling of carbon credits, on a voluntary basis.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Significance<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>By putting a price on carbon, it encourages companies <strong>to find cost-effective ways to reduce emissions.<\/strong><\/li>\n\n\n\n<li>Companies can choose how and where they reduce emissions, potentially leading to more <strong>innovative solutions.<\/strong><\/li>\n\n\n\n<li>Offsetting mechanisms can fund projects that contribute to<strong> environmental sustainability.<\/strong><\/li>\n\n\n\n<li>Carbon finance will be key for the implementation of the<strong> Nationally Determined Contributions (NDCs)<\/strong>, and the <strong>Paris Agreement<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-climate\/china-carbon-market-9567534\/\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>China is seeking public feedback on a plan to include cement, steel, and aluminium production in its carbon emissions trading scheme (ETS).<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-29540","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/29540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=29540"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/29540\/revisions"}],"predecessor-version":[{"id":29541,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/29540\/revisions\/29541"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=29540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=29540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=29540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}