China is the world's largest emitter of greenhouse
gases. Historically, it has been reluctant to cut emissions,
fearing that doing so could impede its economic growth. But there
are signs that position is shifting.
Late last year, the government
banned the building of new coal power plants in particular
areas due to air pollution concerns. Now it has announced it will
seek to implement
a national carbon market by 2016.
The announcement wasn't much of a surprise. Since 2011, China
has been developing seven pilot carbon markets with the aim of one
day creating a national scheme. The National Development and Reform
Commission - the department responsible for the schemes - has long
said it wants to include plans for a national market in
China's next five year plan.
But could a carbon market form the backbone of China's response
to climate change?
pledged to reduce the carbon intensity of its economy -
the level of greenhouse gas emitted for each Yuan of GDP generated
- by 40 to 45 per cent. That means its economy is destined to
become more efficient, but doesn't guarantee an overall emissions
The government is putting
a range of policies in place to help hit that goal. Its
now clear a carbon market is also part of the plan.