Written By: Emma Websdale
In an effort to boost investment in clean technologies and reduce industrial polluting practices, China and Mexico have introduced new carbon trading plans.
This week, China extended its pilot carbon trading plans from the southeast city of Shenzhe to Beijing and Shanghai This means that major emitters of greenhouse gases in those areas will be fined up to RMB100, 000 (US$16,400) if they exceed their emission limits. China is currently the largest emitter of greenhouse gases worldwide.
Over 190 companies in Shanghai have registered for the carbon trading program. Within this program, companies that emit less than a set quota of carbon dioxide have the right to sell the remainder of their quotas to companies who produce more emissions. The Shanghai trading plan is expected to draw in the country’s leading steelmaker, Baosham Iron.
In December, Beijing’s program will launch, with a further 435 businesses participating including state-owned oil and gas company Sinopec Corp and investment bank CITIC Securities. By the end of 2014, when similar carbon trading programs will be introduced to Chongqing, Tianjin, and the provinces of Hubei and Guangdong, the number of businesses that will be trading carbon credits in China will increase dramatically.
China’s pilot carbon trading plans will experiment with local market-based methods of emission reduction. If successful, it aims for the plan to be launched nationwide to reduce China’s environmental impact.
Across the Pacific, Mexico has also announced the launch of its first carbon-trading program, called MEXICO2. The plan’s outline was presented yesterday at the national stock exchange’s auditorium in Mexico City.
The launch of carbon trading plans in China and Mexico comes at a time when UN climate change talks in Warsaw wrapped up with an international agreement to reduce greenhouse gas emissions. With large companies having to spend additional revenue to burn more emissions, the new carbon trading plans will theoretically encourage companies to invest in practices and technologies that in the long term will reduce their emissions.