Seeking to become a player in the global carbon trading system, China announced it will launch a series of test trading programs in 2011 with an eye towards the possible implementation of a mandatory system in the future.
The International Energy Agency reports that China is the world’s largest energy consumer, although the Chinese government has denied these figures and claims it is still #2 behind the United States. Regardless, Chinese power consumption is expected to continue to grow strongly, as its domestic power production. By some estimates, Chinese power capacity could double to 1,600GW within the decade.
China has focused its efforts on energy efficiency and reducing the carbon intensity of its economy as it faces international pressure to keep its skyrocketing greenhouse gas emissions under control. Introducing a carbon price, something the United States has thus far been unable to achieve, would help to increase efficiency without limiting capital flows to the renewable energy and cleantech space.
No firm details have been released yet, but it is expected that a commitment to carbon trading will be incorporated into China’s next 5-Year Plan.