China’s Carbon Trading Market Launches with Mixed Reviews
6 October 2021 By Chermaine Lee and Avery Choi
The world’s largest carbon credit trading system officially kicked off, with the first major deal completed. What’s the future for it?
China’s carbon trading exchange opens to lukewarm reception
China kicked off its carbon-trading exchange — the world’s largest — on July 16 as it pursues the country’s 2060 carbon neutrality goal. It is only limited to the power generating industry, a sector that contributes to 40 per cent of the country’s carbon dioxide emissions.
The first major deal was made on July 21 between the oil and gas enterprise SinoPec and state owned conglomerate China Resources. The oil and gas enterprise purchased permits for a hundred thousand tonnes at 5.292 million yuan (US$818 thousands) from the conglomerate.
The government sets an overall emission limit for the carbon emitting industry and then issues permits to companies allocating them a certain amount of greenhouse gases over a given period of time.
Companies are encouraged to lower their emissions and then sell for a profit the excess carbon allocation on the exchange. Alternatively, heavy emitters can increase their permitted limits by purchasing credits from the low emission companies. So by assigning a value to the carbon emissions, companies have an incentive to be more energy efficient.
There are questions, however, on whether this carbon-trading scheme is ambitious enough to help China in achieving the 2060 neutrality goal. Experts said the initial permits are priced too generously when compared to similar programmes in the EU. They believe that the relatively low cost of the permits might not be severe enough for heavy emitters to consider as penalties and comply.
The unexpected invasive species to the environment
Wild pigs are found to be an “invasive species from a study at the University of Queensland, and is said to have released almost 5million tonnes of carbon — equivalent to 1 million cars.
Pigs love to plough through fields like tractors to look for food and comfort. But by doing so, they are uprooting the carbon trapped in soil. They usually plough as deep as 15 centimetres, about the same depth as crop tilling by farmers. But soil contains three times more carbon than in the atmosphere, so even just a small fraction of carbon released from soil can have a large impact to accelerate climate change.
The area of soil wild pigs uproot annually is equivalent to the size of Taiwan, and sometimes, it can be as large as England. Since they are highly social and often hang out in large groups, they can destroy a paddock in a short time.
Wild pigs are indeed a large threat to humanity’s goal to mitigate climate change. They are native to Europe and Asia, but are not scattered over every continent except Antarctica. In China, a research from the Jigong Mountains National Nature Reserve found that carbon emissions from soil surge over 70 per cent per year in places disturbed by wild pigs.
Countries have been trying to control their rapid breeding rate, as they are known to be able to avoid traps. In China alone, the number of wild boars skyrocketed from a million in 1999 to 33 million in the past two decades. Although current control programmes like aerial control can reduce substantial carbon dioxide, scientists said long-term benefits of reducing wild pigs might far outweigh the costs.
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Sustainable Asia’s podcast “GreenBites’’ is hosted by Chermaine Lee, Khoa Tran, Avery Choi and Stella Chen. Producer: Bonnie Au and Executive Producer: Marcy Trent Long