The national carbon market officially launched, forcing the economic green transformation

On July 16, the national carbon emissions trading market launched online trading. At 9:30 in the morning of the same day, the first national carbon transaction was successfully matched at a price of 52.78 yuan per ton, with a total of 160,000 tons of transactions and a transaction volume of 7.9 million yuan. On the first day, the total transaction volume was 4,104,400 tons, the transaction volume was 210,230,100 yuan, and the average transaction price was 51.23 yuan/ton.

The national carbon market takes the power generation industry as a breakthrough. The 2,225 power generation companies included in the transaction cover almost all thermal power generation companies in my country. The total carbon dioxide emissions exceed 4 billion tons, accounting for more than 1/3 of the national carbon emissions. The agency predicts that the transaction value of my country’s carbon trading market will reach 6 billion yuan this year. By the end of the 14th Five-Year Plan period, the transaction volume is expected to exceed 100 billion yuan. The carbon market will force a green transformation of the economy. Carbon emission reduction will create new demand and give birth to new industries. Green industries such as energy conservation, environmental protection, and clean energy will usher in new development opportunities.

1. Why choose the power generation industry as a breakthrough?

my country has proposed that carbon dioxide emissions will reach the peak before 2030, and strive to achieve carbon neutrality by 2060. The construction of the carbon market is one of the core policy tools to implement this strategic vision. The construction of my country’s carbon market began in 2011. According to data from the Ministry of Ecology and Environment, as of June 2021, in the seven pilot provinces and cities in Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and Shenzhen, the carbon market has a cumulative trading volume of 480 million tons of carbon dioxide equivalent, with a turnover of approximately 11.4 billion yuan.

Since 2020, the construction of the national carbon market has been gradually implemented. In January 2021, the Ministry of Ecology and Environment issued the “National Carbon Emission Trading Management Measures (Trial)”, which became the programmatic document of the national carbon market. Regarding the trading entities of the national carbon market, the “National Carbon Emissions Trading Management Measures (Trial)” stipulates that enterprises that belong to the industries covered by the national carbon emissions trading market and whose annual greenhouse enterprise emissions reach 26,000 tons of carbon dioxide equivalent will be listed as key greenhouse enterprises Emission unit, which is the main trading entity in the national carbon market. In addition, institutions and individuals that comply with the relevant national trading rules can also participate in the transaction, and the coverage of the national carbon market will gradually expand in the future.

The National Development and Reform Commission originally planned to include petrochemicals, chemicals, building materials, iron and steel, nonferrous metals, papermaking, electric power, and aviation into the national carbon emission trading market. Finally, according to the national carbon market construction plan approved by the State Council, the power generation industry was determined For the breakthrough. In the early stage of market operation, spot trading of allowances was only carried out among key emission units in the power generation industry.

The main reason for choosing the power generation industry as the breakthrough point in the national carbon market is that from the experience of the pilots, power generation companies have long been the key participants in the pilot carbon markets. With the deepening of participation, the formation of a unified national carbon market and related supporting policies as soon as possible have become the concentrated call of power companies. The electricity industry has a good data foundation. The products are mainly heat and electricity. They are relatively simple. The data measurement equipment is relatively complete, and the management is relatively standardized. It is convenient for data verification and verification, and the allocation of quotas is relatively simple and easy. Accurate and effective acquisition of emission data is a prerequisite for carbon market trading. Since the beginning of this year, the Ministry of Ecology and Environment has successively issued several documents to further regulate the national carbon emission rights registration, trading, and settlement activities, and provide institutional guarantees for the launch of the national carbon market.

In addition, the power generation industry has relatively large carbon dioxide emissions. The 2,225 power generation companies included in the national carbon market cover almost all thermal power generation companies in my country. The total carbon dioxide emissions included in the national carbon market exceeded 4 billion tons, accounting for more than one-third of the national carbon emissions. After an industry is officially launched, its scale can far exceed any carbon market in operation, which means that China’s carbon emission trading market will become a global carbon market covering greenhouse gas emissions with a large scale once it is launched. Therefore, first of all, the power generation industry as a start-up industry can give full play to the positive role of the carbon market in controlling greenhouse gas emissions.

2. The scale of my country’s carbon trading market is expected to exceed 100 billion yuan by the end of the “14th Five-Year Plan” period

According to my country’s actual situation, the carbon price is mainly determined by the supply and demand situation. Carbon prices are formed through market transactions, so it is normal for carbon price fluctuations to occur, but violent fluctuations are not conducive to the long-term stable operation of the market. Carbon prices should be determined by the overall conditions and trends of economic operation and industry development. Too high or too low a carbon price is not good. Too low will dampen the enthusiasm of companies that actively reduce emissions, and too high a carbon price will cause some high-carbon companies to overburden. At present, the system design related to the national carbon market considers policy measures such as improving the allocation method of allowances and introducing offset mechanisms to guide market expectations, so as to form a reasonable carbon price. my country has built a greenhouse gas emission information management system for key emission units using the national pollution permit management information platform, guided and promoted Hubei Province and Shanghai to complete the construction of the national carbon emission rights registration system and trading system, and passed the system operation test and acceptance. In the next step, it will steadily expand the coverage of the national carbon market industry, enriching trading varieties and trading methods.

At present, my country implements a carbon emission intensity management system, the allocation of allowances adopts the benchmark method to issue allowances to key emission units in the national power generation industry, and the national carbon market has a compliance cycle (January 1, 2021 to December 31, 2021). The issuance has been completed, and it is expected that the final approved quota and covered greenhouse gas emissions will exceed 4 billion tons. In order to avoid a situation where an enterprise participates in both the local carbon market and the national carbon market, the key emission units of the power generation industry that participate in the national carbon emissions trading market no longer participate in the local carbon market transactions.

Before carbon trading, the government will first determine the total amount of local emission reductions, and then issue emission rights to enterprises and other market entities in the form of quotas. For example, a certain energy-consuming unit has an annual carbon emission quota of 10,000 tons. If the unit carries out technological transformation to reduce pollution emissions, and the annual carbon emissions are only 8,000 tons, then the excess 2,000 tons can be sold, and other energy-use Because of the need to expand production, the original carbon emission limit is not enough, and the unit can purchase it. Although there are buying and selling, the total emissions are still controlled within the reduced target range.

The agency predicts that in 2021, my country’s carbon trading market volume may reach 250 million tons, and the transaction amount will reach 6 billion yuan. In 2030, when carbon reaches its peak, the cumulative transaction volume may exceed 100 billion yuan. By the end of the “14th Five-Year Plan” period, the transaction volume is expected to exceed 100 billion yuan, becoming the world’s largest carbon trading market. From a longer-term perspective, the scale of my country’s carbon asset trading market will reach 2 trillion-3 trillion yuan.

3. The carbon market forces the social economy to transition to green and energy-saving

After the national carbon market opens, a unified platform can further regulate carbon emissions trading and stimulate market vitality. In the past, in local pilot projects, due to the different policies and economic developments of different regions, carbon emission rights trading in some pilot areas was restricted, and there were phenomena such as price inconsistency. After the launch of the national carbon emissions trading market, these problems will be solved. In the future, as the coverage of industries expands, quotas become tighter, carbon prices rise, and the living space of high-emission companies is further compressed, it will force economic transformation.

my country is a large manufacturing country with a large industrial scale and high carbon emission intensity. The total amount of carbon emissions control will eventually be implemented in every microscopic subject of economic activities of production and consumption. A series of policies are indispensable to achieve the emission reduction targets of micro-subjects, including a variety of binding mechanisms such as determining a large carbon emission growth schedule as soon as possible, issuing carbon emission permits, and formulating carbon verification standards. In the short term, economic activities may face the problem of rising costs. Only through technological progress and strengthening energy management can the trend of increasing marginal unit emission reduction costs be eased.

After the establishment of the national carbon market, the state’s control of the carbon market has changed from a purely administrative means to a market mechanism, and the transformation and upgrading of enterprises will be promoted at a lower cost. Companies change the existing end-of-pipe governance methods of first production and then governance, and integrate pollution prevention, carbon emission reduction and energy efficiency improvement throughout the production process, and use cleaner production and pollution prevention to reduce the environmental costs and risks of carbon peaks, and reduce the company’s compliance costs , Enhance market competitiveness. The “dual-carbon” target strategy will force the economy and society to move from resource dependence to technology dependence and achieve development. In order to reduce production costs, companies will give priority to green technologies and minimize carbon emissions in production. Companies with green technology and lean management will have more advantages in future competition, and carbon assets may turn into positive income for the company.

When the amount of carbon emission reduction of a company exceeds the carbon emission target issued by the government, carbon trading promotes the company to buy and sell through the secondary market, and the environmental benefits of carbon reduction can be transformed into the economic benefits of the company and enhance the company’s market competitiveness. In addition, subsidies, tax incentives and other means can make up for the environmental costs of corporate carbon emission reduction, and enhance the enthusiasm of companies to continue carbon emission reduction. Although companies with excessive carbon emissions can spend money to purchase credits to “renew their lives”, if they don’t work hard on technological transformation and the use of new energy, it will be difficult to avoid the fate of transformation and upgrading or shutdown and elimination.

Carbon emission reduction will also affect all aspects of the consumption field, realizing changes in consumption patterns, and forcing the production field to reduce emissions. In people’s food, clothing, housing and transportation, people should implement green purchases and green usage, turn off computers in time, bring their own shopping bags, multiple trees, pay attention to green travel, reduce the use of disposable plastic bags, and effectively classify domestic garbage. Not only can it increase the level of resource utilization, it will also greatly reduce the amount of garbage burned, thereby reducing carbon dioxide emissions. Buildings and travel have a large proportion of carbon emissions. The replacement of electric vehicles should be accelerated to reduce the carbon emissions of gasoline vehicles, and the popularization of new energy vehicles should be promoted to reduce energy carbon emissions from consumption and travel. The reduction of carbon emissions in the consumer sector involves all aspects of the consumer sector. Green transformation and development will also create new demands and give birth to new industries. Green industries such as energy conservation, environmental protection, and clean energy will usher in new development opportunities. The upgrading of traditional industries will also give rise to new market demands.

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