It was recently revealed in U.S.-China Joint Presidential Statement on Climate Change that China plans to launch National Carbon Emission Trading System in 2017, covering major industries like steel, power, chemical, building materials, paper-making, etc. Before then, most of the information about the construction of national carbon emission market was informally disclosed by Ministry Officials on various forums. While this is the first time that China officially set out a clear timetable for the national carbon market.
The so-called carbon emission permit refers to the total amount of greenhouse gas emission in the process of energy consumption, including tradable carbon emission permits and required carbon emission permit.
For example, an energy consuming corporation has annual carbon emissions quota of 10,000 tons. If the corporation reduces its annual carbon emission to 8,000 tons through technological transformation and pollution reduction, then the remaining 2,000 tons of carbon emission within its quota could be traded. As for any other energy consuming corporation whose original quota is insufficient for maintaining production, it can purchase carbon emission permit from other corporations. In this way, total carbon emission of a large area could be controllable; and corporations will be encouraged to improve technology for energy saving and emission reduction.
The concept carbon emissions permits was originated in1968 when American economist Dales first proposed the idea of “emissions trade”, which means to establish legitimate rights of pollutant emissions and allow the rights to be tradable in the form of “emission permit”. At that time, Dales had provided a case study in water pollution control. Since then, emissions trade has been taken as means to reduce emissions of sulfur dioxide and nitrogen dioxide.