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China’s carbon neutral goal
Business

China’s carbon trading scheme could reduce emissions by 30 to 60 per cent by 2060, report says

  • ETS could bring about material change by the middle of this decade, says report by Asia Investor Group on Climate Change and Schroders
  • A combined effort involving other policies is needed to help China reach its carbon-neutrality goal, Chinese University scholar says

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A highway in Beijing. China, the world’s largest emitter of carbon dioxide, accounted for 30.7 per cent of emissions globally last year, according to the BP Statistical Review of World Energy. Photo: Simon Song
Yujie Xue
China’s national emissions trading scheme (ETS) could play an important role in the country’s carbon-neutrality drive by potentially reducing carbon emissions by 30 per cent to 60 per cent of current levels by 2060, according to a report released on Tuesday.
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Although the ETS’s initial impact would be limited, it could bring about a more material change in industries and companies it covers by the middle of this decade, according to the report by the Asia Investor Group on Climate Change (AIGCC), a network of asset owners and financial institutions representing more than US$26 trillion in assets under management, and global asset management company Schroders.

“The launch of the national ETS could be one of the most significant drivers of carbon abatement in Asia and, with the right settings, will be instrumental in delivering China’s goals of peak emissions before 2030 and carbon neutrality by 2060,” said Wong Dan Chi, the AIGCC’s vice-chair and Schroders’ head of ESG integration APAC.

The report is significant because China is the world’s largest emitter of carbon dioxide and accounted for 30.7 per cent of emissions globally last year, according to the BP Statistical Review of World Energy. Beijing announced last September that it would try and reach peak emissions by 2030 and achieve net-zero emissions by 2060.
The ETS, which started trading on July 16 under the management of the Shanghai Environment and Energy Exchange, is the world’s largest carbon market in terms of the volume covered.

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China launches world’s largest carbon-trading scheme as part of 2060 carbon neutrality goal

China launches world’s largest carbon-trading scheme as part of 2060 carbon neutrality goal

The report published by the AIGCC and Schroders has studied the potential for emissions reduction created by the ETS in different sectors, including utilities, steel, cement, chemicals and aluminium. It estimates that the scheme could reduce China’s total carbon emissions in 2060 by 3 billion to 6 billion tonnes per year, or 30 per cent to 60 per cent of the country’s total carbon emissions in 2020, depending on the rate of reduction in intensity caps, expansion of industry coverage and carbon inhibition.

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