China Readies National Carbon Market To Fight Climate Change

The lights from the Beijing Environment Exchange — one of seven pilot markets in China for trading carbon — raises questions for the country as it prepares for next year's roll-out of a nationwide system that could help the world's biggest emitter of heat-trapping carbon dioxide rein in its emissions. [...] the pilots have failed to make a noticeable dent in carbon emissions, with about 978 million yuan, or $158 million, traded since their launch in 2013, compared to the 7.2 billion euros, or about $8 billion, of carbon offsets that were traded in the European market in its first year of operation, 2006. If anything, the national plan heralds a strategy change for a country that's so far used its one-party system to order everything from factory closures to barbecue bans by giving companies a money-making incentive to cut their carbon emissions, said Jeff Swartz, international policy director at the Geneva-based nonprofit group the International Emissions Trading Association. Five years ago, European Union officials ended a carbon offset plan that paid Chinese companies to destroy the greenhouse gas HFC-23 after learning that the companies were producing the gas only to be paid to destroy it. Starting in 2013, China set up the seven pilot markets in the country's largest cities — Beijing, Tianjin, Shanghai, Chongqing and Shenzhen — as well as the industrial provinces of Guangdong and Hubei. Since mid-April, the seven markets have traded a total of 31.2 million tons of carbon. In Beijing, any company that emits more than 10,000 tons of carbon a year — equal to the household and vehicle emissions of more than 400 American households — must join the offset market, which means it receives a yearly cap on its emissions and must buy carbon credits if it wants to emit more carbon. For state-owned firms such the Chinese capital's largest power utility, Beijing's pilot market has forced business plans to fa