Good News for the Environment—China and Shell Make Major Announcements

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Good News for the Environment—China and Shell Make Major Announcements

It has been a good week for the environment—China will implement a landmark national cap-and-trade program, and Shell abandoned its plans to drill in the Arctic.
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Green Builder CEO, Sara Gutterman

Green Builder Media

Wednesday, October 7, 2015 - 8:00am

CAMPAIGN: Saving Water

CONTENT: Blog

Climate experts have always said that there are two primary factors that will determine the future health of our planet—China’s continued reliance on coal and other dirty energy sources, and achieving price parity for renewables so that investment in fossil fuel drilling, production, and distribution becomes infeasible and unprofitable. Fortunately, two momentous announcements were made this week that indicate progress on both fronts.

China's Cap and Trade
First, China, the world’s largest polluter (accounting for nearly 30% of total global emissions), announced that it will implement a major carbon-trading system by 2017, placing a price on carbon dioxide emissions and encouraging big polluters (including those in the power, iron and steel, cement, chemicals, building materials, and paper industries) to adopt clean energy sources.

The cap-and-trade system will place a fee on every ton of carbon emitted by polluters, allowing companies to trade permits based on their emissions levels. The program will invariably result in an aggressive economy-wide reform, directing funds away from fossil fuels towards renewables.

China will also implement a “green dispatch” system that will prioritize power generation from renewables and the lowest-emitting fossil fuel sources, and it will soon reveal new heavy-duty vehicle emissions and building efficiency standards as a part of the country’s overarching plan to tackle climate change.

The announcement is a follow up to the breakthrough deal forged by Presidents Obama and Xi Jinping last November in Beijing, in which China pledged to reduce its use of coal and other dirty energy sources, accessing 1/5th of its power from renewables and reaching peak emissions by 2030.

Experts who have been following China’s climate action progress claim that the announcement was a natural extension of seven regional carbon markets that are already active—and successful—across the empire. Prices for carbon emissions in these regional programs are on par with similar programs across the globe.

While grappling with difficult issues like cybersecurity, currency devaluation, human rights, and the increasing militarization of the South China Sea, this particular accord between China and the U.S. on climate action represents a bright spot in relations between the two countries. The two superpowers have found common ground and developed a shared vision for climate action that they’ll bring to the U.N. climate summit in Paris in December, including bilateral efforts and domestic policies that bring much-needed credibility to the agreement forged last November, as well as $3 billion dollar investments (from each country) to help developing countries deal with our changing climate.

Nonetheless, China’s announcement puts pressure on the U.S., the world’s second biggest polluter, to adopt similar programs to measure, price, and charge for carbon emissions. There are several cap-and-trade models that the U.S. could emulate, such as those already in place in California and the Pacific Northwest, but clearly, the mitigating factor remains political stalemate.

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Keywords: Environment | China | Energy | Energy Efficiency | Green Builder Media | Shell | climate change | environment

CAMPAIGN: Saving Water

CONTENT: Blog

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