November 27, 2013
Energy is a big emitter of carbon. Further, carbon emissions are highly correlated to climate change. Under these conditions it is vital to determine how the energy mix is structured. As nations determine their energy mix by the milestone dates of 2020, 2025 and 2040 the question is how to manage emissions. The reliance of coal has made the “World’s top carbon emitter China expands emissions trading” as one step to reduce carbon.
“China has emerged as the world’s top producer of carbon emissions, ahead of the United States. China’s commercial hub Shanghai began carbon emissions trading on Tuesday, as the nation which is the world’s biggest carbon emitter expands a pilot scheme. Shanghai is the second Chinese city after Shenzhen to trade carbon to try to limit emissions, with the capital Beijing to follow later this week, state media said.”
As the typical remedy to sell and buy credit to offset emission is one remedy but does not change the processes that cause emissions. “Under the scheme, companies which exceed their quota of carbon emissions can buy unused allocations from others — providing a market incentive to control pollution. But the official Xinhua news agency said only 191 companies were taking part in Shanghai, a huge city of 23 million people. They included firms from the steel, chemical and aviation sectors, it added,” reports Channel NewAsia.
China has approved carbon trading in seven locations, including the cities of Tianjin and Chongqing, as well as Hubei and Guangdong provinces.
“The Shanghai government has set annual carbon emissions quotas for the companies for 2013-2015, but has not publicly revealed them. Participating firms could face fines of up to 100,000 yuan (US$16,400) and lose government subsidies if they fail to abide by the scheme, the Shanghai Daily newspaper said. On the first day of trading, the market conducted three transactions for 5,000 tonnes, 4,000 tonnes and 500 tonnes, the Shanghai Environment and Energy Exchange said, at prices from 25 to 27 yuan per tonne of carbon.”
“Analysts say the scheme’s limited range means it is unlikely to have much impact.” Making carbon emissions a transactional remedy instead of a systemic process change does not allow for behavioral modification or industrial reengineering to counter emissions and establish best practices to alleviate carbon. The cost to emissions are yet to be fully understood as a consequence of industrial boom.