China is not ready for global carbon market, said Minister Xie

China is not ready for global carbon market, said Minister Xie

China is not ready for global carbon market, said Minister Xie

(Lima, Peru) Despite that the pilot carbon markets have been successful, China is not ready for a regional or global carbon market, said Minister Xie Zhenhua at Lima COP 20.

Minister Xie, the head of the Chinese delegation to Lima, said at a side event that China would no doubt stick to carbon markets.

“The pilots are very successful.” Said Xie. “The signal of success is not carbon price, but the exploration of potential regulations and pilot systems that are in different levels of development.”

In 2013, China established pilot carbon market in two provinces and five cities. All cities practice different carbon trading models.

Former CDM Executive Board Chair Duan Maosheng said, one lesson learned from the pilots is that a bottom to top model is far too difficult for China. Future domestic carbon markets will be top-town uniform markets.

According to Duan, the biggest challenge facing the pilots is lack of data and human resources.

Xie, the vice minister of China's National Development & Reform Commission, said once the State Council approves the carbon cap and trade plan, carbon markets will initiate immediately.

According to NDRC, China plans to kick off the market exchange in 2016-2017; by 2020, the market will cover all provinces and all high emission, energy-intensive sectors in China.

By 2020, the national carbon market is expected to regulate 3-4 billion tonnes of carbon dioxide per year and the spot carbon is expected to reach 1.2-8 billion yuan per year.

“It’s the right time for China to start regional or global carbon markets with other countries. We should establish domestic market before cooperating with other countries in the global market,” said Xie.

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