Shanghai has fully paid its carbon emission allowance by Sept 30 in 11 consecutive years, announced the Shanghai Municipal Bureau of Ecology and Environment. This significant achievement underscores Shanghai’s unwavering commitment to sustainability and carbon emission reduction since the inception of its pioneering carbon emission trading program.
Carbon emission trading, a pivotal mechanism in the fight against climate change, involves the buying and selling of carbon emission allowances that permit companies to emit a specified amount of carbon dioxide. Since Shanghai initiated its carbon emission trading market in late 2011, the trading volume has surged to 256 million tons, valued at 5.081 billion yuan ($718.45 million).
Regarded as a cost-effective tool for curbing carbon emissions, carbon emission trading has incentivized enterprises to proactively engage in emission reduction efforts. Companies have realized that environmental protection measures not only contribute to sustainability but also have the potential to generate revenue. This dual benefit has spurred enterprises to embrace carbon emission reduction initiatives driven by stringent policies, vigilant supervision, and robust law enforcement.
Shanghai became one of the first seven provinces and cities designated by the National Development and Reform Commission to implement regional carbon emission trading in November 2011. Presently, Shanghai’s carbon market encompasses 378 key enterprises spanning 28 industries such as steel, electricity, aviation, and shipping, collectively responsible for 60 percent of the city’s total carbon emissions.
Over the past decade, Shanghai has witnessed a remarkable decline of over 50 percent in total carbon dioxide emissions per unit of GDP. In a bid to further enhance environmental protection measures, Shanghai’s environment bureau has introduced a collaborative mechanism for reducing air pollution, offering additional carbon emission allowances to enterprises demonstrating exceptional performance in emission reduction efforts.
Moreover, Shanghai has implemented an innovative system for the advance allocation of carbon emission quotas. Listed enterprises that have fully paid for their 2023 quota are eligible to receive 80 percent of their validated emissions in advance, facilitating market transactions and promoting greater efficiency in emission trading. To date, Shanghai has allocated quotas in advance to 153 enterprises, totaling 28.76 million tons, leading to a significant surge in trading activities and cumulative value.
Source: Shanghai Observer
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