China could create € 90bn emissions trading market

China was to launch its own version of the carbon trading system by the end of the year, which was supposed to reach 6,000 enterprises in the beginning. It is currently reported that only 1,700 companies will be included in the beginning.

The system should be introduced by companies that annually produce more than 26 thousand tons of carbon dioxide. In general, it should create a market of over 3 billion tons. Some analysts and industry managers believe that permits should cost at least € 30 per tonne, which will significantly accelerate the use of less environmentally harmful forms of energy. If this happens, the value of the Chinese carbon market will reach € 90 billion.

The value of the European permit market is currently around 14 billion euros, but for several years the price has been around 7 euros per tonne. According to Chinese experts, this is the result of a mistake made during the 2009 crisis - then the volume of production decreased significantly, some enterprises stopped working, but the number of market permits did not change. Therefore, their value began to decline rapidly from € 25 in 2008, even below € 5. The Chinese say their system will take into account changes in the market.

At the moment, however, it is unknown when he will move. In some regions, there are pilot programs in China. In September this year, their total value was 4.5 billion yuan, or about $ 680 million.

Efforts are also under way in Europe to raise the price of emission permits to € 30 per tonne. The introduction of such an amount in China could offset the competitiveness of many sectors of the economy, such as metallurgy. For years, European steel companies have warned that spending on European climate policies is making them less competitive in the global marketplace.

With this calculated threshold, the system would cover almost all of China's power plants, which account for 39 percent of that country's emissions. Permits should be allocated using a reference method that will better manage a larger number of companies and achieve lower emission levels.

Even a limited form of licensing market will lead to significant reductions in carbon dioxide emissions. China has been the largest emitter of CO2 in the world since 2006, in which it overtook the United States. In 2016, China produced 9.123 billion tons of this gas, and the United States - 5.35 billion tons. However, in the United States, it was impossible to introduce such a system - it was blocked by the Senate of this country. The Donald Trump administration is even more distracted from the climate policies of its predecessors and many other developed countries of the world.