BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/50
China’s role in Paris has changed from earlier climate summits, where it opposed binding commitments and timetables. This time around, China wants to see approval of a final document. Not only has China committed to reducing its CO2 emissions by 2030, but has promised to launch a nationwide emissions trading scheme (cap-and-trade) in 2017. The NDRC, which is responsible for the emissions trading scheme, announced that the scheme will apply to about half of all China’s carbon emissions. Nearly 10,000 firms representing six branches of the economy will participate. Given that China is the world’s largest source of carbon emissions, its commitments are however rather modest.
China’s huge air pollution problems and environmental degradation have become hot topics in the current domestic policy debate, and underlie the country’s about-face at the Paris talks. Moreover, the slowing economy and structural changes have made it easier to reach emission targets. By some estimates, the economic slowdown and efforts at improving air quality mean that Chinese carbon consumption has already peaked.
Beijing’s recent air quality readings give some indication of the seriousness of China’s pollution problems. On Tuesday (Dec. 8), officials issued the highest-possible air quality warning with harmful particulate readings in some places exceeding by 40 times the level considered safe under WHO recommendations. While it was the first time a red alert on bad air had ever been issued in Beijing, many residents observed that the air quality has been worse, e.g. the previous week. On Tuesday, factories and construction sites were shut down, driving of private cars restricted and heavy transport vehicles banned altogether. Schools were ordered to remain shut and people were advised to stay indoors.
Air quality alerts were also issued in a number of cities in Beijing’s surrounding provinces, leading to restrictions on driving and factory production. For example, several cities in Hebei province issued red alerts. The measures are expected to impact December’s economic output figures.