City to Implement Carbon Trading Program Tomorrow
Around 600 industrial enterprises in Shenzhen will be now be able to trade carbon emission credits at 30 yuan per ton at the China Shenzhen Emission Exchange as the city launches the program tomorrow. Rights to about 100 million tons of carbon emission are allocated to 635 enterprises and construction projects for the next three years and will be based on their previous emissions and added values based on the city’s carbon trading program.
Any enterprises that emit less than their allowed emissions can trade the remaining allowances in a carbon trading market for 30 yuan a ton thus creating a cap and trade system. When an enterprise exceeds its allowance the must buy carbon credits in the market or risk penalties. Greenhouse gases emitted by enterprises and accounts for 40 percent of the total emission in the city, by implementing the carbon trading program the city will cut carbon emissions by 21 percent by 2015.
And since vehicle emission accounts for the majority of the green house gases, Shenzhen is planning to incorporate public transportation in the carbon trading program and to promote the use of new energy buses and vehicles. Also by implementing the carbon trade program, enterprises will be forced to do transformations or upgrades.
While some enterprises are worrying in inappropriate allowances that might jeopardize the carbon cutting effort. When allowances are too high, several enterprises might not feel the pressure to cut down, thus making it hard to reach the emission reducing goals. And is allowances are too low enterprises might transfer to neighboring cities that hasn’t implemented the trading program.
Shenzhen is one of the seven cities to serve as a pilot area for the carbon trading in China.