China ramps up climate action with emissions trading scheme

China - the world's largest polluter - has announced a series of bold new climate commitments, including the creation of an emissions trading scheme and a $3.1bn low-carbon funding plan.


Chinese President Xi Jinping made the announcements in a joint press conference with President Obama during a state visit to the US.

A key part of the new plan is the confirmed rollout of a nationwide emissions-trading system by the end of 2017, covering at least six core industrial sectors that make up the bulk of China’s emissions.

The idea of such a scheme has been mooted before, but this is the first time it has been confirmed by the President and the first time that the sectors it will cover – power generation, iron and steel, chemicals, cement, paper production, and nonferrous metals – have been named.

Money talks

Xi also confirmed that China will be making a $3.1bn pledge to the Green Climate Fund (GCF) to help developing countries cut their emissions and adapt to climate change.

The commitment far surpasses the existing Chinese climate finance pledge of $20m a year. It also surpasses the US’ $3bn commitment to the GCF which still needs to be ratified by Congress.

The commitment is expected to generate positive momentum ahead of the Paris climate talks, where one of the major sticking points in the build up was how to fund low-carbon development in emerging nations.

Greenpeace China described it as a “game-changer in international climate politics”.

“This is strong medicine,” said Rhea Suh, president of the Natural Resources Defense Council.

“It lays to rest the flawed argument that Chinese pollution is an excuse for U.S. inaction. And it sends a powerful signal that China will join other countries in the global fight against this worldwide threat, setting the table for an effective international climate agreement later this year in Paris.”

Since China’s commitment, the UK has also upped its climate aid fund by more than 50%, and campaigners expect more countries to follow.

Common vision

Also announced as part of China’s package of climate commitments was the introduction of a green dispatch system for the Chinese grid, where low-carbon electricity gets prioritised over ‘dirty’ power. The adjustment looks to improve a longstanding issue in China, where much of the electricity generated by windpower goes unused thanks to grid connection issues.

Finally, the joint statement also included a “common vision” for the ambitious climate agreement sought by the two countries in Paris. The vision called for an agreement that “ramps-up ambition over time”, and an “enhanced transparency system to build mutual trust”.

Brad Allen

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