How can carbon trading achieve greenhouse gas emission reductions?
Carbon dioxide emissions dropped by 2.38%, carbon emission intensity dropped by 8.78%, and the cost of carbon emission reduction of thermal power dropped by 35 billion yuan. The national carbon market has gone through two compliance cycles, and the industry's emission reduction results have begun to show. At the 2024 Beijing International Metropolitan Clean Air and Climate Action Forum held during the 2024 China International Fair for Trade in Services, a set of figures attracted the attention of reporters. How does carbon trading promote greenhouse gas emission reductions? How will we further leverage the role of the carbon market mechanism in optimizing the allocation of carbon emission space resources in the future?
Promote the construction of an effective carbon market for the government and give full play to market functions
"The national carbon market has achieved emission reduction results due to the gradual establishment and improvement of the institutional system." Zhang Xin, chief economist of the National Center for Strategic Research and International Cooperation on Climate Change, said.
The institutional system is gradually established and improved to promote the effectiveness of the national carbon market to achieve emission reduction. With the promulgation and implementation of the "Interim Regulations on the Administration of Carbon Emissions Trading" by the State Council, the Ministry of Ecology and Environment has also issued the "Measures for the Administration of Carbon Emissions Trading (Trial)", issued three rules for registration, trading, and settlement, and organized and revised Carbon emission accounting reports and verification guidelines, quota allocation plans and other normative documents, a multi-level institutional system covering "administrative regulations + departmental rules + normative documents + technical documents" has been formed. At the same time, it also forms the legal and policy basis for the construction and operation of the national carbon market.
Doing a good job in the allocation and payment and performance management of carbon quotas is another important basis for improving the national carbon market institutional system and effectively leveraging the market mechanism of the national carbon market. "By establishing a reasonable carbon emission baseline, eliminating backward production capacity, not restricting the production of advanced carbon-emitting generating units, rewarding advanced and punishing backward, we have better handled the relationship between greenhouse gas emission reduction and economic development." Zhang Xin said.
In the management of the construction and operation of the national carbon market, it is crucial to properly handle the relationship between the government and the carbon market trading mechanism and better play the role of the government, which directly determines the success or failure of the construction and operation of the carbon market. On the one hand, the carbon market is a market with strong policy dominance, and factor design and supervision and management are concrete manifestations of the government's will to control carbon emissions. On the other hand, the carbon market mechanism will also weaken its emission reduction effectiveness due to its spontaneity and blindness. The government provides strong impetus and institutional guarantee for the orderly operation and healthy development of the carbon market.
To this end, Zhang Xin said that it is necessary to use systematic thinking and innovative methods, strengthen top-level design in accordance with the laws of the market economy, consolidate the foundation of laws and regulations, actively and steadily expand the market scale, enrich market elements, and optimize quota allocation and settlement management. At the same time, strengthen departmental coordination, establish a joint supervision mechanism, effectively connect markets for other environmental resource factors, and build a unified national carbon market with unified systems, rules, and supervision.
Voluntary emission reductions encourage the whole society to participate extensively in carbon reduction actions
The mandatory carbon market strictly controls the emission behavior of key emission units, while the voluntary carbon market encourages the whole society to participate extensively in emission reduction actions. "Through voluntary emission reduction trading, companies can obtain economic returns and participate more proactively and consciously in the development and application of low-carbon technologies." Wang Naixiang, chairman of Beijing Green Exchange Co., Ltd., introduced.
In January 2024, in order to mobilize the entire society to participate in greenhouse gas emission reduction, the national voluntary greenhouse gas emission reduction trading market was officially launched. The mandatory carbon market and the voluntary carbon market operate independently and are connected to each other through a quota payment and offset mechanism. The two together constitute the national carbon market system.
What are the characteristics of the current national voluntary emission reduction trading market? Wang Naixiang gave the answer at the scene: "At present, my country's voluntary emission reduction trading market highlights the 'voluntary' attribute. In the early stage of the market launch, the primary task is to improve the institutional system and improve the management model. After the market achieves a stable start and stable operation, it will gradually expand Voluntary carbon market support areas and strengthen market functions."
Highlighting the "voluntary" nature and the role of market entities, as of September 8, 2024, a total of 37 projects from 14 provinces including Guangdong, Xinjiang, Jiangsu, and Fujian have applied for registration, covering offshore wind power generation, solar thermal power generation, afforestation carbon sinks and mangrove forest construction, and are expected to generate emission reductions of approximately 10.885 million carbon dioxide equivalent every year.
However, for the promising voluntary emission reduction market, it is only the beginning. How to further develop the national voluntary emission reduction trading market? Wang Naixiang told reporters that there are two important conditions for developing a voluntary carbon market. One is to ensure high-quality supply, and the other is to have a large-scale, liquid and demand-oriented market.
"China has special characteristics in terms of supply and demand in the voluntary carbon market. We are currently the largest supplier of carbon credits and may also be the largest demander in the future. This determines that we need to adapt to the development trend of the international voluntary carbon market and learn from various major exchanges. Experience in exchanges, carry out diversified, market-oriented and international exploration, and promote the construction of a more effective, dynamic and internationally influential Chinese voluntary carbon market." Wang Naixiang said.
