The financial crisis facing Europe’s Emissions Trading Scheme (ETS) will not deter China from intention to establish its own Sheme and its climate pledges.
An official of China said, the efforts to cut greenhouse gas emissions were a “domestic requirement”.
China has pledged some targets to the international community to deal with climate change and will keep going no matter what other countries might do and what happens to its economy.
Specifically, China will reduce 2011 levels of carbon intensity (the amount of climate-warming carbon dioxide produced per unit of GDP growth) by 40-45 percent by 2020. It also has vowed to increase the share of non-fossil fuel energy to 15 percent of its total energy mix by the same period and close vast swathes of inefficient industrial capacity. ($1 = 0.7668 euros)
Under the impact of financial crisis, Europe’s Emissions Trading Scheme (ETS) is facing a crushing oversupply of carbon credits and record low prices without the EU parliament’s any help especially the bailout.
In the system of ETS, enterprises emit greenhouse gases with the carbon credits perchased from the market.
Carbon prices on Europe’s ETS were trading at an all-time low of 2.46 euros ($3.21) per tonne on Tuesday, down from 18 euros just two years ago.
An expert of China said, “Why have the prices gone from such a high to such a low? Because of the rate of emissions cuts,” he said. “If it was higher, and if there were more pressures, the market would be much more active. It is probably related to the initial design of the exchange and the way emissions targets were allocated.”
China is planning a similar domestic scheme in which carbon-intensive enterprises and industries can meet their own targets by acquiring the emission quotas allocated to other firms.
In the next few years China will establish a carbon market according to Chinese conditions and the conditions of developing countries.
Seemingly, China would learn from mistakes made in Europe, especially when it comes to prices, with Shanghai set to include a mechanism by which carbon credits can be taken off the market when supplies are too high and prices too low.