China to institute cap-and-trade system

The same day that Senate Majority Leader Harry Reid (D-Nev.) announced that he did not have the votes to pass a cap-and-trade bill, even a scaled-down utility-only version, news broke that China has decided to institute its own cap-and-trade system, though the details remain fuzzy.

Why is this significant? Republicans have long argued that there is no sense in capping greenhouse gas emissions in the United States if major emitters like China refuse to impose caps of their own. The announcement appears to deflate that argument, although Republicans can still make the same argument about other major emitters that are not capping their emissions.

This development was not lost on environmentalists, who pointed out the irony that China has acted before the United States to reporters yesterday.

The state-run China Daily reported yesterday:

The country is set to begin domestic carbon trading programs during its 12th Five-Year Plan period (2011-2015) to help it meet its 2020 carbon intensity target.

The decision was made at a closed-door meeting chaired by Xie Zhenhua, deputy director of the National Development and Reform Commission (NDRC), and attended by officials from related ministries, enterprises, environmental exchanges and think tanks, a participant told China Daily on Wednesday on condition of anonymity.

“The consensus that a domestic carbon-trading scheme is essential was reached, but a debate is still ongoing among experts and industries regarding what approach should be adopted,” the source said.

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