China’s carbon trading scheme could reduce emissions by 30 to 60 per cent by 2060, report says

China’s national emissions trading scheme (ETS) could play an important role in the country’s carbon-neutrality drive by potentially reducing carbon emissions by 30 per cent to 60 per cent of current levels by 2060, according to a report released on Tuesday.

Although the ETS’s initial impact would be limited, it could bring about a more material change in industries and companies it covers by the middle of this decade, according to the report by the Asia Investor Group on Climate Change (AIGCC), a network of asset owners and financial institutions representing more than US$26 trillion in assets under management, and global asset management company Schroders.

The report is significant because China is the world’s largest emitter of carbon dioxide and accounted for 30.7 per cent of emissions globally last year, according to the BP Statistical Review of World Energy. Beijing announced last September that it would try and reach peak emissions by 2030 and achieve net-zero emissions by 2060.

The ETS, which started trading on July 16 under the management of the Shanghai Environment and Energy Exchange, is the world’s largest carbon market in terms of the volume covered.