Environment China's Emissions Trading Strategy to Turn Contradictions of a Major Power into Resources (circa 2007)

Environment China's Emissions Trading Strategy to Turn Contradictions of a Major Power into Resources (circa 2007)

Around 2007, China's rapid economic growth made it the world's largest greenhouse gas emitter. China's dependence on coal-fired power reached more than 70%, and air pollution in urban areas became more serious. On the other hand, the economic growth rate remained around 10% per year, and energy demand continued to grow. To overcome this contradiction between growth and environmental constraints, China found a way to take advantage of the Clean Development Mechanism (CDM) under the Kyoto Protocol. Hundreds of projects, including wind, small hydropower, methane capture, and biomass power generation, have grown to account for about half of all registered projects worldwide. It has secured foreign currency revenues in the order of $3 billion a year through emissions trading, and has transformed climate change action into a new means of economic growth.

In Japan, the Circular Economy Promotion Law (enacted in 2008) and the Energy Conservation Law have been revised, and industrial upgrading and energy conservation policies have become pillars of the national strategy. The development of renewable energy and the introduction of energy-saving technologies were encouraged by the establishment of these systems and the use of emission rights revenues, and environmental measures were positioned as "food for growth" rather than "constraints.

In this way, around 2007, China took advantage of international criticism and incorporated the emission rights market as part of its economic strategy. This attitude of viewing the environment as a resource was later carried over to the low-carbon city model and the national emission rights market (officially operational in 2021), forming the foundation of China's current climate strategy.