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After almost a decade in the making, China’s national CO2 emissions trading scheme is now pretty much here. Loads of ppl are going to have loads of opinions, as they should. Having covered the whole painful process, here are some thoughts from me, fwiw:
It starts out quite shit, but with the full structure in place, the government can turn it into a useful tool overnight IF it wants to. Big if and not likely to be done for a while (it took NZ over a decade).
It doesn’t make China a global leader on climate. It also isn’t a massive scam. It’s just a mediocre climate policy tool that has suffered from other policy priorities held by more powerful institutions than enviro ministry.
There are going to be loads of problems first few years, and no doubt a few scandals. Data quality a huge issue, made more urgent by decision to leave provincial governments in charge of verification.
Some of those scandals will be similar to what markets elsewhere have suffered, some will be China-specific. Both types can be overcome if govt wants to. Another IF.
Most worryingly, China’s gut instinct to always publish as little data as possible risks eliminating any credibility the ETS could ever hope for. If market fundamentals are kept secret and scandals hushed, it’ll be a serious reputational burden.
It’ll be an ill-fitting tool to achieve anything at all as long as Chinese ministries continue to churn out new policies without any interest in what’s going on in other departments – often seemingly gleefully overlapping and overruling each other.
But – and this is the whole point of even paying attention – the minute China wants to put the ETS to work, it can be efficient. Absolute and decreasing cap, transparent data, coordinate with energy/industry depts. Over to you, 11. #OCTT ?end
