Policy Dispatch Podcast Sam Morgan - 28/April/2023

China’s carbon trading tribute act

Emissions trading can help the industry go green by putting a price on carbon, a policy that is paying off in Europe in a big way. China is looking to emulate that success in its market. Refinitiv’s Yan Qin explains what the future might hold for it

            


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China is the latest country to get into emissions trading, launching a nationwide market in 2021 and using several regional and local pilot projects as a springboard. Many of the details still need to be hashed out, and the low price means that it is far too soon to see any actual decarbonising impact. But we have been here before: when Europe launched its emissions trading system nearly two decades ago, the early years were plagued by low prices, a glut of pollution permits and a regulatory system that did not extract the full potential from the market. Subsequent reforms have patched loopholes and dragged the price of carbon into a window where industries are now being forced to adopt greener technologies not to fall foul of the polluter pays principle. China has taken inspiration from the EU ETS and hopes to iron out the kinks in a shorter time span.

Yan Qin, an expert in all things carbon market from Refinitiv, joins the Policy Dispatch this week to share her insights into China’s nascent effort, how it stacks up against the EU’s, and what the future holds for the promising policy. The discussion also dips into what China will hope to avoid as it develops its market, what other countries might be influenced by this development and to what extent Chinese efforts to price carbon are an attempt to defuse Europe’s new climate and trade superweapon, the carbon border adjustment mechanism. 

Enjoy the dispatch!


If you have any thoughts or questions about anything that has been discussed in this week’s episode, you can reach us at our Twitter accounts:
Yan Qin
Sam Morgan
@Policy Dispatch
FORESIGHT Climate & Energy


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