China Daily:

Could you please give us an introduction to the overall construction progress of the national carbon emissions trading market and the plan for the follow-up work? Thank you.

Xie Zhenhua:

This work is organized and promoted by the Climate Change Department, the Ministry of Ecology and Environment. I would like to invite Mr. Li to give you some information on that.

Li Gao:

Thank you. It is a major institutional innovation to establish a nationwide carbon emissions trading market in a bid to control greenhouse gas emissions through the market mechanism. It is also an extremely complicated and systemic-based project. We have set up carbon trading pilot schemes in seven provinces and cities since 2011, analyzing relevant experiences as part of the groundwork for establishing a nationwide and integrated carbon emissions trading market. Generally speaking, these pilot schemes have made good progress since trading began in June 2013, with total transactions reaching 270 million tons of carbon dioxide and the trading volume surpassing 6 billion RMB. In the regions that have introduced pilot schemes, the total amount of carbon emissions as well as carbon intensity have both decreased. Thus, the carbon emissions trading market has indeed been significant for meeting our target of controlling greenhouse gas emissions and promoting regional low-carbon development.

On the other hand, we are still learning from the developed countries. As Mr. Xie has mentioned, China is not the first country to establish a carbon emissions trading market. Over the past few years, we have proactively learnt from and drawn on the lessons of the experiences of the E.U. as well as the state of California, making them an important reference in the design of our carbon emissions trading market. We released "The Development Plan of the National Carbon Emissions Trading System (Power Generation Sector)" at the end of 2017, which marked the launch of the carbon emissions trading system (ETS). After that, we have carried out a series of activities and kept advancing the work in regard to reporting, examining and checking carbon emissions in 2016 and 2017. We have made significant progress by proposing an initial design plan for the registration and trading systems, both of which are crucial for development of the ETS. We have also carried out a lot of work in the power generation sector, the first to implement carbon emissions trading, such as the design of carbon quota distribution and the compilation of training materials. In September, the Ministry of Ecology and Environment held a mobilization meeting and carried out large-scale training to ensure the preparation of the power generation sector as the first to join the national carbon ETS. We will continue to advance the relevant work by firmly upholding the principle of considering the carbon ETS as our policy tool in controlling greenhouse gas emissions. It is an important original intention to establish the carbon ETS.

We will steadily advance the phased building of the carbon trading market. After the power generation industry, we will gradually involve more industries and various related parties in carbon emission rights trading and enrich the trading category. During this process, we will be cautious to avoid adverse speculation and over-financialization. We also seek to prevent financial risks and make full use of the carbon market to both reduce greenhouse gas emissions and save related costs.

We will step up the building of the carbon trading market in the following four aspects: First, issuing regulations and supporting rules. Together with relevant departments, we will further advance the adoption of the temporary regulation on the carbon emission rights trading, fundamental to market operation. We will later issue some supporting rules, all of which are currently in the drafting process.

Second, we will boost necessary infrastructure development. So far, the enterprise direct reporting system has taken shape, but needs improvement. We have formed preliminary plans for the registration and trading systems, and we intend to waste no time in their argumentation and optimization.

Third, better managing the work related to quota allocation and verification of the carbon emission reports of key emitters. Next year, we will verify the reports submitted in 2018. Besides, we will exert more efforts in nourishing third party verification agencies. As for the power generation industry, we will issue a guidebook on its quota allocations and encourage spreadsheet making with the guidebook in enterprises. This will enhance the statistical foundation and ensure the quota allocation plan better matches practice.

Fourth, strengthening capability building. Ecological authorities and other related government agencies and organizations should all acquire necessary capacities. Local ecology authorities will have a role to play in managing the carbon trading market, and they need to do more in personnel training and capability building. We have been proactively pushing ahead with technique preparations since the nation launched the carbon trading system in late 2017.We will work harder and try to realize trading as soon as possible. Thank you.

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