On July 16, China celebrates the third anniversary of its national carbon market, a landmark initiative driving the nation’s green transformation. Over the past three years, the market has seen the cumulative transaction volume of carbon emission allowances exceed 460 million tonnes by July 15, 2024, with a total transaction value nearing 27 billion yuan (approximately $3.86 billion).
\ \The price of carbon dioxide emissions per tonne has risen significantly, from over 40 yuan at the market’s inception to around 90 yuan today, with historical peaks surpassing 100 yuan. This upward trend reflects the market’s stability and effectiveness in promoting environmentally friendly practices among power generation enterprises.
\ \“Higher carbon pricing means enterprises face increased costs when purchasing carbon emission rights,” explained Yu Xiang, director from the Institute of Ecological Civilization at the Chinese Academy of Social Sciences. “However, for enterprises with surplus quotas, they can reap substantial returns by selling these allowances.”
\ \The carbon market incentivizes companies to reduce their emissions, not only for environmental benefits but also for economic gains. The growing value of carbon allowances encourages enterprises to innovate and adopt greener technologies to free up surplus quotas.
\ \A prime example is Huadian Xiangyang Power Generation Corporation in Hubei Province. Motivated by the carbon market, the company has turned to biomass power generation using tree bark and agricultural waste. This shift has enabled them to reduce carbon dioxide emissions by 50,000 tonnes annually.
\ \“By reducing carbon emissions through biomass operations, we’ve liberated carbon quotas for our other generators,” said Yang Tao, head of biomass operation and maintenance at the company. “This transition saves us 2 million yuan in expenditure each year.”
\ \The success stories emerging from China’s national carbon market highlight its role as a catalyst for sustainable development. As enterprises continue to embrace green technologies, the market not only contributes to China’s environmental goals but also showcases a model of how economic incentives can drive ecological progress.
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China's national carbon market incentivizes green transition
cgtn.com
