China Sets Up A Giant Straw-Man Carbon Market Twice Size Of EU

What would China do if it wanted competitors to keep shackling themselves to an industry-crippling religious weather-fetish?

1. Mock their economy-killing stupidity openly til they realized it, or
2. Nod vigorously and set up a big inflatable strawman idol in the streets of Shanghai? It protects no fields but looks convincing to Greenpeace and good enough for Goldman Sachs…

Notice the size of the carbon markets: The EU’s trading scheme is the largest in the world and “covers” 1.8 gigatons of carbon emissions.  China’s power sector (just power) produces 3 gigatons of emissions.

The plan is to carefully strap a very mild carbon market on the Chinese power sector starting in 2020 and expand it later to other industries which would then include some 5 gigatons of emissions.

Sounds like a marvelous advert for people trying to sell carbon trading schemes:

Clean-energy advocates trumpeted the creation of the planet’s largest carbon market, which will be nearly twice the size of the European Union’s.

The headline in TechnologyReview, James Temple:

China is creating a huge carbon market—but not a particularly aggressive one

Not aggressive is the phrase  – join these dots:

• … The government’s goal, for now, is to reduce the rate of increase in emissions rather than to achieve absolute reductions…
•  …. This approach will encourage plant operators to improve the efficiency of plants, [but] it “weakens or eliminates the incentives … to shift from coal to gas or renewables,” according to the Nature Climate Change paper.

So this is the kind of giant carbon market where emissions will still increase and there will be no incentive to stop using coal.

Note the main outcome — factories will get more efficient — which is a nice side benefit which happens in every maturing economy anyhow.

The Chinese know exactly what they are doing.

…early signs indicate that China is taking an extremely cautious approach, driven by fears of undermining economic growth.

If only we could be so lucky.

It’s not that China is slow, dragging its feet or uncaring:

The ultimate success or failure of China’s program will be crucial because the nation emits more than a quarter of the world’s carbon dioxide, and levels are rising at their fastest rate in years, according to one recent analysis.

Though there is this small disconnect:

Hitting worldwide climate goals will be nearly impossible unless China begins making sharp cuts soon.

Which clearly China has no intention of doing.

Much is riding on this program — ( much money, many bureaucrats, lotta junkets.)

Moreover, the nation’s effort could influence how other countries pursue similar market-based approaches to cutting carbon pollution. “Internationally, much is riding on this program,” Stanford economist Lawrence Goulder and a co-author wrote in a paper earlier this year. “Failure could impede the adoption of emissions trading programs in many parts of the world.”

It’s not like the global climate is at stake…. we just need to protect those endangered emissions trading programs.

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