From publications to policy: China launches world’s largest carbon market

The topic of carbon pricing is a growing area of research in China. Academic output has more than doubled from 527 articles over 2012–2015 to 1 312 over 2016–2019 (Straza and Schneegans, 2021).

In 2019, Chinese scientists contributed as authors or co-authors to 40.7% of the global publications on carbon pricing, up from 17.4% in 2011. China’s pattern drove the trend for upper middle-income economies to increase their global share of research on this topic from 25.9% in 2011 to 50.7% in 2019 (Straza and Schneegans, 2021).

These findings are part of a study by UNESCO of trends in academic publishing on 56 sustainability topics in 193 countries over the years from 2011 to 2019. This study was published in the UNESCO Science Report.

As with many other research topics, the dominance of high-income economies in global publishing on carbon pricing is fading as countries in other income groups invest in sustainability research. Between 2011 and 2019, the share of publishing on carbon pricing from high-income economies dropped from 74.6% to 61.5% (Straza and Schneegans, 2021).

Contribution by income group to global academic publishing on carbon pricing, 2011–2019 (%)

Source: UNESCO (2021), using Scopus data treated by Science-Metrix; data visualization by Values Associates

A national carbon emissions trading system

In December 2017, the Chinese government released a National Carbon Emissions Trading Market Construction Plan (Power Generation Industry), which kicked off the national carbon emissions trading system. The government has decomposed carbon-related indicators by region, introducing measures tailored to each situation to promote low-carbon development. These include energy savings through greater efficiency and an emphasis on high-tech manufacturing and services to the detriment of low-end manufacturing (Cao, 2021).

These measures translate policy documents such as the Workplan to Control Greenhouse Gas Emissions in the Thirteenth Five-year Plan Period (2011−2015), the National Climate Change Plan (2014−2020) and National Climate Change Adaptation Strategy (2007) (Cao, 2021).

One of the biggest problems with any carbon credit scheme is setting a price that is too low. Cheap offsets do not result in change that will reduce the total amount of carbon emissions, which the world needs to do within a decade to avoid the most catastrophic effects of climate change (IPCC, 2018).

The true test of carbon pricing and the trade of carbon credits will be whether it leads to lower national and global emissions. At the United Nations General Assembly in September 2020, President Xi Jinping announced plans for China to become carbon-neutral by 2060 (Cao, 2021). In 2019, China was responsible for 27% of global carbon emissions. However, its per capita emissions — at about 6.8 tonnes of CO₂ per person — are less than half those of the USA, Australia and Canada (Nogrady, 2021).

Measures to promote low-carbon development

China’s Revolutionary Strategy for Energy Production and Consumption (2016−2030) has fixed targets for non-fossil energy consumption of 15% by 2020 and 20% by 2030. The focus has been on developing core technologies and a manufacturing capability in nuclear power, hydropower, wind and solar energy (Cao, 2021).

By 2018, China had 48 nuclear power plants in operation – double the number three years earlier – and a further nine under construction (Cao, 2021).

China has invested heavily in upgrading technology for manufacturing hydropower units and pumped storage units. This hydropower capacity, along with natural gas, nuclear and wind power, has enabled China to reduce its consumption of coal by about 540 million tonnes and energy consumption per unit of GDP by about 11.4% since 2006 (Cao, 2021).

More recently, the loosening of restrictions on coal plant development since 2019 has seen the number of regions obtaining permits for new coal plants climb from three in 2016 to 15 in 2019 and 19 in 2020 (Cao, 2021).

By 2018, China’s carbon intensity had weakened by about 46% over 2005 levels, exceeding the target of reducing carbon intensity by 40–45% by 2020. Renewable energy sources accounted for 27% of total electricity generation, a year-on year increase of 0.2% since 2016. In 2017, three-quarters of renewable energy came from hydropower, 18% from wind and 8% from solar power, according to the International Energy Agency, which noted that modern renewables accounted for 8% of China’s final energy consumption (Cao, 2021).

For details, read the chapter in the UNESCO Science Report on China and that entitled Are we using science for smarter development?

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References

• Cao, Cong (2021) China: In: UNESCO Science Report: the Race Against Time for Smarter Development. S. Schneegans, T. Straza and J. Lewis (eds). UNESCO Publishing: Paris.
• IPCC (2018) Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. Intergovernmental Panel on Climate Change.
• Nogrady, Bianca (2021) China launches world’s largest carbon market: but is it ambitious enough? Nature News, 20 July.
• Straza, T. and S. Schneegans (2021) Are we using science for smarter development? UNESCO Science Report: the Race Against Time for Smarter Development. S. Schneegans, T. Straza and J. Lewis (eds). UNESCO Publishing: Paris.
• UNESCO (2021) UNESCO Science Report: the Race Against Time for Smarter Development. S. Schneegans, T. Straza and J. Lewis (eds). UNESCO Publishing: Paris.