China Kicks Off First Day of Carbon Emission Trading
China kicked off the first day of trading that is said to be the largest carbon market that has pricing that is in line with the expectation that China is still continuing its drive in slowing down the rapid growth of heat trapping emissions. The volume of the Guangdong carbon permit market which experts say that is also the second biggest based on carbon dioxide covered. As the early trade has surpassed their full day total in their launch of the three carbon exchanges in the country.
China is planning to use the markets to achieve their target of cutting emissions to per unit of gross domestic product to 40 to 45 percent below the 2005 levels before 2020 which they say is at the lowest possible cost. Shanghai, Shenzhen and Beijing was already opened their own carbon trading markets which was followed by other cities in the following months. The China Emissions Exchange in Guangzhou made its debut went in line of their market expectations of 61 yuan with a signed deal with cement company Hailao which in turn bought 20,000 carbon permits from a new energy arm of power producer Huadian Energy.
The debut trade was followed be a series of other deals which had a total of 120,000 permits which is also known as the Guangdong Emissions Allowances in just the first 20 minutes of the trade which was sold for 60 yuan each. The other emissions market in China also saw half of that volume during their debut days as well which the price level matched expectations after a government auction of 3 million permits were sold.
Some experts have warned against the risk of price volatility in long term use and the emission markets is usually very pricesensitive in the early stages as seen in Europe and New Zealand.