Our article: How should local ecological and environmental departments respond to the expansion of the national carbon market?
Carbon emissions trading is an important institutional innovation to promote the construction of a beautiful China, a traction task to deepen the reform of the ecological civilization system, and a key policy tool to achieve the goal of carbon peak and carbon neutrality. Recently, the Ministry of Ecology and Environment publicly solicited opinions on the "National Carbon Emissions Trading Market Work Plan for Covering the Cement, Steel, and Electrolytic Aluminum Industries" and released corporate greenhouse gas emission accounting reports and verification technical guidelines for the cement and aluminum smelting industries, marking the national The expansion of the Carbon Emissions Trading Market (CETS) has taken a key step.
The expansion of the national carbon market will bring greater challenges to local ecological and environmental departments
The local ecological and environmental department is a key party in the construction, operation and supervision of the carbon market. It is responsible for the supervision and management of local carbon emission trading and related activities. It is responsible for formulating a list of key emission units, issuing carbon emission quotas, and organizing monthly storage and annual storage of greenhouse gas emissions. Reporting and verification, supervising the payment and performance of carbon emission quotas, conducting on-site inspections and law enforcement, etc., the task of supervising the entire chain of emission data is heavy.
Since the launch of trading in 2021, the national carbon market has entered the third compliance cycle, and the carbon market supervision surrounding the power generation industry in various places has become relatively mature. However, as the carbon market expands, local ecological and environmental departments will face new challenges and greater pressure. Overall, it is mainly reflected in three aspects.
First, the contradiction between factor allocation and investment and workload has intensified. After the institutional reform in 2018, local ecological and environmental departments were assigned the responsibility of responding to climate change, but many places have not independently set up climate change agencies, especially at the prefecture-level city level, and their staffing is seriously insufficient. In some places, the responsibility for dealing with climate change is even borne by the atmospheric environment management agencies in the ecological and environmental departments that have very heavy pollution prevention and control tasks. There is a large mobility of personnel and prominent problems of part-time employment. In addition, many places have not set up special funds to deal with climate change, making it very difficult to guarantee funds and increase investment.
Second, the pressure on supervision of the quality of greenhouse gas emission data has increased. Real and accurate data is the basis for determining carbon emissions, carbon emission performance obligations and approving carbon emission quotas. Compared with the power generation industry that has been included in the carbon market, the newly included industries involve industrial production processes and non-carbon dioxide greenhouse gas emissions. They have higher measurement and monitoring requirements, stricter sample collection and testing standards, more complex accounting processes, and monthly certificate deposit work. It is even more arduous, and hidden dangers of data quality risks still exist. In addition, enterprises in the cement and other industries in some regions are relatively concentrated. After the expansion of the carbon market, the number of key emission units will double, and the pressure on data quality supervision from the ecological environment department will increase significantly.
Third, achieving regional "100%" compliance is even more challenging. Fulfilling carbon emission quotas on time and in full is the core link in realizing the carbon trading mechanism's function of promoting carbon emission reduction. 100% compliance of key emission units is the bottom line for the long-term development of the carbon market. Cement, aluminum smelting and other industries are basic industries. The energy consumption and carbon emission levels of different regions and different enterprises vary greatly. Under the quota allocation method based on carbon emission intensity, some enterprises will have carbon emission quota gaps, some of which have energy efficiency The carbon emission quota gap for enterprises with low carbon efficiency levels may be large. In addition, the trading price in the carbon market is already at a high level compared with the early days of the opening of the market, and the cost for companies to participate in market transactions and complete performance is higher, resulting in increased performance pressure on some companies and reduced profitability. The situation of fully completing performance in the region is not optimistic.
Take multiple measures to improve the supervision and management capabilities of local ecological and environmental departments
In recent years, some places have carried out many explorations and accumulated some experience in adapting to carbon market construction and supervision. The author suggests that local ecological and environmental departments should take the initiative to adapt to the new situation of dual control of carbon emissions and carbon market development, take the opportunity of deepening the reform of the ecological civilization system to clarify their positioning, increase investment, improve capabilities, make up for shortcomings, and prevent risks. Take a more proactive and more positive attitude to welcome and adapt to the expansion and development of the carbon market, and help build a more effective, more dynamic, and more internationally influential carbon market.
The first is to put carbon market work in a more prominent position. To identify the responsibilities of the ecological and environmental department, we must not only be a good "leader" in carbon market construction, but also be the "main force" in real carbon market supervision. On the one hand, promote the integration of carbon market work into the work schedules of party committees and governments in the region, promote overall coordination, capital investment and regulatory coordination on a larger scale and with greater intensity, and coordinate and leverage development and reform, industry, energy, market supervision, finance, Finance and other departments work together to provide regulatory services such as energy conservation and carbon reduction, measurement and monitoring, inspection and testing, certification and accreditation, and carbon finance to form a joint effort. On the other hand, establish a carbon market working mechanism that adapts to the new situation and new requirements, conduct regular research and deployment of carbon market work, strengthen carbon market institutional construction and policy supporting, formulate carbon market work plans or key points every year, and embody key tasks in the carbon market. Standardize and incorporate them into the ecological and environmental protection assessment system.
The second is to increase investment in institutions, staffing and funds. Focusing on the provincial and municipal levels, strengthen communication and coordination with local compilation and management departments, and support local ecological and environment departments with more enterprises that incorporate the carbon market and heavier regulatory tasks to prioritize setting up separate specialized agencies to deal with climate change and even the carbon market. Reasonably equip institutions, staff and provide guarantees for adapting to the incremental work of the carbon market. Where special funds to address climate change have not yet been established, funding guarantees for monthly certificates, annual inspections, daily inspections, capacity building, basic research and other work should be increased through departmental budgets, and efforts should be made to establish special funds to address climate change as soon as possible. Increase support for the improvement of enterprise measurement and testing capabilities, the construction of online carbon emission monitoring systems, the construction and upgrading of carbon asset management information platforms, and the implementation of major carbon emission reduction projects through special funds for ecological and environmental protection or climate change, so as to better mobilize the enthusiasm of enterprises and initiative.
The third is to carry out extensive and in-depth actions to improve carbon market capabilities. Combined with the local work foundation, investment capabilities, enterprise distribution, etc., we will clarify the ideas, goals, directions, forms and key tasks for carrying out carbon market capacity building, and improve data quality and performance capabilities in a phased and step-by-step manner. Integrate carbon market work into the cadre training and business training system of the ecological environment system, focus on improving the capabilities of data quality control plan control, monthly deposit certificate review, on-site inspection and law enforcement, etc., and prevent and investigate illegal activities such as data fraud. Focusing on key links such as measurement and testing, accounting verification, quota allocation, market transactions, performance settlement, information disclosure, and system platforms, we organize and carry out carbon market capacity building activities for enterprises in different industries, high-frequency, and multiple forms to promote enterprises to improve carbon emissions management systems, improve carbon asset management capabilities, optimize carbon market performance strategies, carry out energy efficiency diagnosis, equipment renewal, and carbon reduction transformation in an orderly manner, and steadily improve carbon efficiency levels.
The fourth is to make full use of professional forces such as technical support service institutions. Establish an expert group and technical support team for carbon market work in the region, improve the comprehensive support capabilities of directly affiliated units for the carbon market, and strive to establish a climate change response center or a carbon market supervision affairs center. Explore the introduction of market-oriented forces through government procurement and other forms, and provide technical support for quality control plan review, monthly certificate deposit review, on-site inspection and law enforcement, etc. Give full play to the role of industry associations in energy conservation, environmental protection, cement, nonferrous metals, steel and other industries in the region, strengthen industry capacity building and basic research, standardize industry behavior, and strengthen industry self-discipline. Cultivate the low-carbon service market, find out the list of local technical service institutions related to carbon emissions such as consultation, verification, inspection and testing, verification and calibration, promote the service compliance construction of third-party institutions, and continuously improve professional service capabilities and levels.
Author's unit: Xiang Liu, Li Yanjie, Sichuan Province Environmental Policy Research and Planning Institute; Zhang Cheng Jinyi, Leshan City Ecological Environment Bureau, Sichuan Province
