Advertisement
Climate change
OpinionComment
Zhibin Chen
Zhibin Chen

Macroscope | Done right, China’s new voluntary carbon credit market can be a game changer

  • Since China halted the scheme in 2017, international scrutiny of carbon credits has intensified and expectations will be high
  • To fulfil its potential as a world-leading standard, the scheme must be revamped to meet international standards and be extended to projects outside China

Reading Time:3 minutes
Why you can trust SCMP
1
On China’s National Low Carbon Day on July 12, volunteers check on solar panels in Taizhou, Jiangsu province. Photo: CFOTO/Future Publishing via Getty Images
Zhibin Chen
China’s voluntary carbon market is poised to be a game changer, advancing regional endeavours to reach net-zero targets. As whispers of a relaunch echo through the carbon trading circle, the market response has been nothing short of exuberant.
Advertisement
Known as the China Certified Emission Reduction (CCER) scheme, the carbon credit system has the potential to become the world’s most influential carbon offset standard, thanks to the robust backing of the national Emissions Trading Scheme (ETS) – the globe’s largest mandatory carbon market covering around 4 billion tonnes of emissions.

Credits bought under the voluntary CCER scheme can be used to offset up to 5 per cent of any emissions that exceed ETS targets, presenting the tantalising prospect of meeting an annual carbon offset demand of 200 million tonnes.

But a reboot of China’s voluntary carbon scheme will find not just a regional “carbon boom” but also heightened international scrutiny. As the integrity and quality of voluntary credits increasingly come under the spotlight, there will be new expectations for the Chinese scheme.

If China can manage to revamp its voluntary carbon credit scheme into an internationally acclaimed, high-quality emissions reduction mechanism, it will become pivotal to global carbon trading.

Advertisement
With more Asian countries pledging to achieve carbon neutrality by mid-century, the carbon market has emerged as a highly sought-after investment opportunity. New trading platforms and related domestic initiatives have sprouted in Hong Kong, Singapore, Thailand and Malaysia, positioning them as Asia’s potential trading hubs for voluntary carbon market credits.
loading
Advertisement