February 16, 2014 by CaliforniaCarbon.info
CaliforniaCarbon.info, February 16, 2014: Following on the heels of the memorandum of understanding (MoU) signed in October last year by California governor Jerry Brown and Vice-Chairman of China’s National Development and Reform Commission (NDRC), Xie Zhenhua, the two nations have now released a joint statement in which they pledged to work together to maximise greenhouse gas reductions in the coming years.
The two nations have agreed to work on five initiatives launched under the China-US Climate Change Working Group (CCWG): Emission Reductions from Heavy Duty and Other Vehicles, Smart Grids, Carbon Capture Utilisation and Storage, Collecting and Managing Greenhouse Gas Emissions Data, and Energy Efficiency in Buildings and Industry. The CCWG will also facilitate the sharing of information regarding post-2020 plans to limit greenhouse gas emissions.
The sixth China-US Strategic and Economic Dialogue takes place later this year, and it remains to be seen what progress will be made. For a long time, China and the US have occupied diametrical positions in discussions on climate change action. The US has been keen for China to contribute to the global movement against climate change, whereas China has tried to claim that, as a developing nation, it should not have to face reduction targets of similar steepness to those handed to developed economies.
This joint statement makes no mention of any plan to collaborate on using emission trading schemes. It remains to be seen how China plans to layer its cooperation on broad climate change goals and strategies at the national level with the evaluation of approaches and policies relevant to California cap and trade at a subnational level.
To date, five emissions trading schemes have been initiated in China, with Shenzhen, Shanghai, Beijing, Tianjin, and Guangdong province having begun the system of emissions permitting. Hubei and Chongqing are set to launch their own cap and trade programs in the near future. Each province or city has a peculiar cap-and-trade program, with, for example, different proportions of freely-allocated credits, as well as different transactional rules or approaches to offset inclusion. The first program to price the primary market, Guangdong, set a floor at 60 yuan (USD 9.90) for its inaugural December 2013 auction. This was 7.6% lower than California’s price floor of $10.71 for 2013. China will base its decision on a federal emissions trading scheme based on the fortunes of the seven pilot projects. If a nationwide program does kick off, that might in turn put pressure on the US to concretely define its emission reduction pathway.
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