紅寶石拖鞋？Ruby Slippers? Expansion of China's Carbon Market Delayed as USA Rides for Free on Global Climate Efforts

By Mathew Carr

May 17, 2022 — China is seen delaying the expansion of its carbon market beyond the power industry for one or two years, as USA lawmakers continue to delay their efforts to install biting climate laws.

The USA, with only 4% of the world’s popuation, is most to blame fro the climate crisis. For a fourth consecutive decade, the nation’s politicians are finding excuses not to act.

The direct result of its inaction is the refusal of other large countries to speed their energy transitions.

China was meant to expand its emissions trading system by this year, but it’s now seen delaying that potentially to 2025, because of bad data / reporting, according to Financial / Caijing Eleven.

China’s now the biggest emitter in the world by far and that’s understandable to some extent because it has the biggest population. It too shares blame for delayed climate action. The world’s two biggest economies are blatantly riding (almost) for free on Europe’s climate efforts.

China’s industry had expected that three industries — building materials, non-ferrous metals and steel — would be included in the national carbon market this year, according to the report.

However, after the carbon emission data quality problems of thermal power companies were exposed last year, the investigation and rectification work by the competent authorities is still in progress.

“Several sources recently told Caijing Eleven that the time for adding other industries to the national carbon market will be delayed by one to two years, and the earliest in 2023 will include cement in the building materials field and electrolytic aluminum in the non-ferrous field,” Caijing Eleven said.

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Here are the problems in China

First, companies are suspected of subjective and / or intentional falsification, resulting in serious inaccuracy of carbon emission accounting results;

Second, they are suspected of illegally modifying parameters and data, resulting in inaccurate carbon emission accounting results;

The third, they are suspected of incorrect parameter selection and statistical calculation, and irregular quality control;

The fourth is the issue of accounting boundary compliance.

Source: report linked above

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Taking Anhui Province as an example, the investigation team found a total of 21 problems in 12 companies in the province’s 2020 carbon emission report, of which the second type of problems accounted for 10, and the rest were the third and fourth types of problems. The Ministry of Ecology and Environment requires all localities to complete the rectification by the end of April 2022, according to the report.

USA Problems

Meanwhile in the USA, Sen. Bernie Sanders on Sunday called out two moderate Democratic senators for blocking key aspects of President Joe Biden’s legislative agenda, according to Politico.

In an interview on NBC’s “Meet the Press,” Sanders singled out Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona for their resistance to Democrats’ nearly $2 trillion climate and social spending legislation, dubbed Build Back Better.

See this good roundup LinkedIn post by

Josh Margolis• Senior Commercial Advisor, Emergent Forest Finance Accelerator and CarbonSim. Markets by Choice – Results by Design. Carpe diem, quam minimum credula postero. Doing what I can, while I can, to make the future better. • Edited • 2 days ago

Mugged by reality, 1.5°C moving from hope to nostalgia. https://lnkd.in/gnvtZwVR

The US has not passed any major climate legislation. The Biden administration has rolled back limits on domestic oil and gas drilling.
➖Efforts to remove conventional pollutants have amplified the effects of climate change. https://lnkd.in/gTBjXu-3
➖We are still building infrastructure that is predicated on extracting and burning fossil fuels.
➖After decades of R&D, and billions of dollars spent, synthetic industrial CCUS and DAC are:
•Removing rounding errors of what’s necessary
•Net additive of GHGs and criteria pollutants
•Extremely expensive, and would require a pipeline network that exceeds that of the current global oil handling infrastructure. https://lnkd.in/g4Fq3i6S

Neither ruby slippers, hope, nor pixie dust will get us there. The best means to deliver a 1.5°C world along with a thriving global and just economy are policy interventions that feature:

✅A series of science-based, declining, transparent, enforceable, economy-wide, and sovereign-administered caps that will deliver sufficient, necessary, and timely reductions.

✅Government administrators that have the ability to accurately monitor sources and the willingness to impose consequential penalties on scofflaws.

✅Because we have limited financial, temporal, and carbon budgets, a trading element that encourages accelerated and over-compliance…that turns waste managers into profit seekers.

✅An auction mechanism that provides a price signal and revenues that can be used to:
➖Ease the low carbon transition;
➖Addresses environmental justice needs; and
➖Provide monies that are used to address the needs of the current plebiscite and future generations.

✅An offset system that:
➖Provides results-based climate finance;
➖Ensures offsets are of the highest quality and jurisdictional in nature or that will not promote a shift of high carbon activity outside of the project fence;
➖Motivates entrepreneurs outside of the cap to voluntarily deliver high-quality reductions while also demonstrating the viability of new technologies;
➖Provides sources with a price-relief valve;
➖Will deliver durable and far-reaching cobenefits for the originating jurisdiction and communities; and
➖Slows and reverses deforestation and protects other nature-based sinks.

✅A firm commitment with near-term metrics to zero-out fossil fuel subsidies ($909 billion in 2017 https://lnkd.in/gUKqJRG).

And here’s a final message that may cause some discomfort for my economist friends. You, of all people, should advocate for:
➖A market that delivers necessary and timely reductions at the lowest possible price.
➖Market administrators who possess the wisdom to understand that a low carbon price is an indicator that ambitions should rise and the cap should be lowered.

A doctor treats the underlying conditions, not the fever. Those seeking to heal the climate must insist on reductions, not high prices.
https://lnkd.in/gJb9dizM