Lu WUBuilding Sustainability

吴露绿建部门

NZ fox glacier photo

Solar power carbon offset project photo

Outline

• What is carbon trading?

• What is the ultimate goal of carbon trading?

• Criticism of carbon trading

• China carbon trading market

• Arup relevant services

What is carbon trading?

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Right to emit

Right Emission Right Emission

Economic basis: Property rights

Carbon pricing: a solution to negative externality caused by carbon emission/climate change

Demand vs Supply

Political basis: International law Kyoto Protocol

Operational basis: ET, CDM, JI

Trading vehicle: Allowance, Emission Reduction Unit

Right

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Right to emit

What is the ultimate goal of carbon trading?

Reduce overall carbon emissions in a most cost efficient way

Mitigate Climate Change

For the 1st time drive human being jointly combat with a global issue of negative externality

A trigger to reshape the economy

This is a vision of the future that goes beyond just surviving or enduring climate change,

beyond “mitigating” and “adapting” to it in the grim language of the United Nations. It is a

vision in which we collectively use the crisis to leap somewhere that seems, frankly, better than

where we are right now.

--Naomi Klein in This Changes everything capitalism vs the climate

We shape a better world

Criticism of carbon trading

Criticism of carbon trading

Is it a dangerous distraction?

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Verified emissions of EU capped emitters

Mt CO2-eq Source: EU ETS Source: IDIACMt CO2-eq

The capped emissions decreased while the global dependence on the fossil fuel increased.Carbon leakage happened and carbon bubble may occur if all the efforts including carbon pricing mechanism do not work.

You have been negotiating all my life. --Anjali Appadurai, 21 years old

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Global Fossil-Fuel CO2 Emissions

The share of emissions covered by ETS only amounts to 10% of total so far.

Source: State and Trends of Carbon Pricing/2014

Criticism of carbon trading

Source: GHG Data - UNFCCC%

We see Framework Convention on Climate Change works.

Source: UNFCCC

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Criticism of carbon trading

China carbon trading market

China carbon trading

China Fossil fuels Combustion Carbon Emission Ranking

9977 MTCO2

1st out of 2162013

Source: Global carbon atlas

8040 MTCO2

1st out of 2162012

2.1 kgCO2/GDP11th out of 2162013

7.2 tCO2/person51th out of 2162013

1.8 kgCO2/GDP7th out of 2162012

5.8 tCO2/person52th out of 2162012

Production based

Consumption based

Whole Country Per Person Per GDP

China carbon trading

Transfer of emissions=Production based - consumption based

Source: Global carbon atlas

Transfer

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Transfer emissions of China

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Global transfer emissions 12%

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14%12% 11% 11%

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Percent of China in Global Transfer

China carbon trading

2009.11

Cut 40-45% emissions on the 2005 basis by 2020

2011.10

Officially announce to set up 7 province/city carbon trading pilots

2012.06

China GHGs voluntary emission reduction management method (pilot version)

2013.6

Shenzhen carbon trading pilot launched

2013.11

Beijing Shanghai carbon trading pilot launched

2013.12

Guangdong Tianjin carbon trading pilot launched

2014.4

Hubei carbon trading pilot launched

2014.6

Chongqing carbon trading pilot launched and the 1st

year of carbon trading compliance period closed

2014.11

Target to reach the emission peak value by 2030, non-fossil fuel ratio of 20% in total primary energy consumption

China carbon/fossil fuel based energy reduction commitment and carbon trading action milestones

China carbon trading

China carbon market size and trading price

Price Shenzhen

Shanghai

Beijing

Guangdong

Tianjin

Hubei

Chongqing

Trading volume: 17 MTCO2Average trading price: 35.56 CNY/TCO2

Total allowance volume: around 1200 MTCO2

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China Carbon Trading Pilot Allowance Volume

Beijing Shanghai Guangdong Hubei Chongqin Shenzhen

Source: 2014 China Carbon Market Report by SinoCarbon Innovation & Investment

Arup relevant services

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Reduce overall carbon emissions in a most cost efficient way

Mitigate Climate Change

A trigger to reshape the economy

For the 1st time drive human being jointly combat with a global issue of negative externality

Help the client understand how much is their emissions, where does the emissions come from, how does the emissions relate to the normal operation, what is the best way to monitor, measure and reduce emissions, what risks and opportunities would the relevant carbon reduction regulations or carbon market bring to the clients, either regarding a project, a community or a corporate.

Actively engaged in relevant international climate friendly actions or alliances such as C40, 100 City Resilience, the Ellen MacArthur Foundation’s Circular Economy 100.

Arup relevant services

Arup relevant services