The first time that carbon trading enters official documents, aviation power should be piloted first

Experts suggest that energy, electricity and aviation as the pilot project Recently, the State Council issued the "Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries." It was mentioned for the first time that a major pollutant and carbon emissions trading system should be established and improved. On October 21, the interpretation of the “Decision” issued by the National Development and Reform Commission once again mentioned that in order to implement and implement the “determination” deployment and requirements, a major pollutant and carbon emissions trading system should be established and improved. This is the first time the country has mentioned "carbon trading" in official official documents.

The industry believes that a year ago, the relevant departments of the National Development and Reform Commission also refrained from using the word “carbon trading”. Now the State Council issued a document clearly using the term, stating that the high-level attitude towards establishing a domestic carbon trading market is clear. Experts suggest that during the “12th Five-Year Plan” period, the country should first establish carbon trading pilots in industries such as energy, power, and aviation.

Aviation petroleum power should be piloted from January 1, 2012. All carbon dioxide emissions from flights taken off or landing at airports within the European Union will be included in EUETS (EU Emission Trading System). According to relevant requirements, the European Union will impose carbon dioxide emission limits on airlines that fly in and out of the European Union and within the European Union’s internal routes, and those that exceed the limit will be charged to the relevant airlines.

In view of this, Huang Jiefu, vice president of the Chicago Climate Exchange, suggested that airlines with more European routes such as Air China, China Southern, and Eastern Airlines can gradually participate in domestic carbon trading pilots during the “Twelfth Five-Year Plan” period. The advantage is that if the domestic carbon indicators are recognized by the European Union, domestic civil aviation companies can use the domestic carbon indicators to offset EU indicators. Even if the indicators of the two cities cannot be docked temporarily, they can greatly increase the negotiating leverage between domestic civil aviation companies and the EU on this issue.

In addition, taking into account that the United States may impose carbon tariffs on Chinese exports in the future, Huang Jiefu also suggested that large domestic export enterprises can also participate in the carbon trading pilots, which will increase the gaming power of related companies and the United States. Prepare military training for export companies in response to international carbon warfare.

In fact, related companies have already done so. Two years ago, 53% of the Tianjin Environment Exchange was established by CNPC. According to overseas media reports, Gas China has just hired Cass Edwards, former head of environmental protection products at Citibank, as the head of its new carbon trading department in London.

Tang Renhu, chief scientist of carbon investment and carbon market at CITIC Securities, suggested that since oil and electricity are monopolized industries, the main players in the company are PetroChina, Sinopec, CNOOC, and the Big Five power companies, compared to the competitive industries in which there are a large number of entities such as steel and cement. The internal constraints of carbon emission reductions in both industries are easier to design and implement, making them more suitable for piloting carbon trading.

Will become the new darling of the “Twelfth Five-Year Plan” investment Yang Hongwei, director of the CDM project management center of the National Development and Reform Commission’s Energy Research Institute, said in an interview with a China Securities Journal reporter that past experience has shown that the effect of relying solely on administrative measures to achieve emission reduction targets is limited. Therefore, during the "12th Five-Year Plan" period, it is necessary to introduce market mechanisms to improve China's emission reduction system. "Effective emission reductions rely on short-term effects, but they will ultimately result in higher abatement costs. The previous quarters have been the best example to achieve power reductions in order to achieve emission reduction targets."

Huang Jiefu, vice president of the Chicago Climate Exchange, suggested that domestic carbon trading must be piloted first, and follow the laws of the market to gradually establish a price signal system that conforms to the laws of the market. The formation of a truly mobile carbon price through the market leads to the introduction of funds on the one hand, and on the other hand guides the emission reductions of related companies. Under the flow of price signals, whether it is the use of absolute total control or relative carbon intensity as the target, it can be designed with specific operations.

Industry insiders analyzed that the establishment of carbon trading pilots during the “12th Five-Year Plan” period will benefit companies that have a dominant position in the carbon intensity per unit of GDP. The release of this policy signal will make carbon trading a new darling of investors during the “12th Five-Year Plan” period. According to the latest World Bank report, the total global carbon market in 2009 increased by 6% to 144 billion U.S. dollars, of which China's share of the global carbon trading market is less than 1%.

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