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chinafactoryLast weekend, China announced its plans to implement a nationwide cap-and-trade program beginning in 2016. 

This is major news for global climate change, as China has been the number one emitter of carbon dioxide since 2007. It burns almost as much coal as the entire world combined and is responsible for 25 percent of global greenhouse gas emissions.

American policymakers who oppose carbon taxes have used the excuse that reducing emissions is meaningless so long as China is unwilling to do the same. If China implements its proposed cap-and-trade system, that argument will be obsolete.

A cap-and-trade system is essentially a “sin tax” on pollution. Companies calculate their gas emissions and put a yearly cap on that volume. The companies are then issued permits by regulatory agencies for the calculated cap. If emissions exceed the cap, then companies are forced to buy more permits or cut their emissions.

China already has at least six pilot cap-and-trade programs running throughout the country. If the government implements a nationwide program, it will create the largest carbon market in the world.

Similar cap-and-trade plans are in the works for South Korea, Thailand and Vietnam.

Sun Cuihua, a climate change official with China’s National Development and Reform Commission, the country’s main economic planning body, has confirmed that Beijing plans to enforce cap-and-trade in 2016.

This lends the announcement some weight. Earlier this year, a plan to place an absolute cap on the country’s carbon emissions was revealed to be the recommendation of one government consultant and not actual forthcoming policy.

Because of its accelerated industrialization, China now faces health hazards from tainted soil and poor air quality. Between 2002 and 2010, lung cancer rates in Beijing, the nation’s capital, rose over 50 percent. This has led to the proposal of the Beijing 2020 plan, which would prohibit the use of fuel oil, petroleum coke, combustible waste and biomass fuels in the city.

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  1. […] pushing his country towards cleaner energy and last week China announced its plans to implement a nationwide cap-and-trade program in […]

  2. […] carbon emissions. The country (now ranked as the top polluting nation in the world) plans to have a nationwide cap-and-trade program in place by […]

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