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China Launches Pilot Carbon Emissions Trading System

With its usual talent for copying the most successful, China is starting small

2 min read
China Launches Pilot Carbon Emissions Trading System

At the beginning of this week, China launched a pilot greenhouse gas cap-and-trade emissions trading program in Shenzhen, the high-tech boom city near Hong Kong, with the intention of soon expanding the experiment to four other major cities and two regions. The initial trial applies to 635 companies in the Shenzhen Special Economic Zone, which collectively emitted greenhouse gases equivalent to 31 million metric tons of carbon dioxide in 2010. For the totality of the three-year trial, their emissions will be capped at 100 million metric tons of carbon, implying a significant reduction from what they otherwise would be, given expected economic growth.

China's strategic objective in the seven-element experiment is to move the country in the direction of sharply reducing the ratio of emissions to growth. At the 2009 Copenhagen climate conference it promised to cut that ratio 45 percent from 2005 levels by 2020.

The 635 companies subject to the Shenzhen cap account for about a quarter of the city's GDP and two fifths of its CO2 emissions. Though at first glance it may seem ludicrous to be capping emissions at levels higher than they are today, this is widely accepted, albeit with considerable distaste, as the price that must be paid for winning industrial support for trading schemes. And though the biggest and most notable carbon trading scheme, Europe's Emissions Trading System (ETS), has been crippled almost from the start by excessively generous permits, smaller-scale and much less splashy carbon trading experiments have sometimes been astonishingly successful, notably the U.S. Northeast's.

The fact that China has promised to cut emissions relative to economic growth does not guarantee it will follow through and succeed, needless to say. But the choice of Shenzhen for its first trading system sends a powerful message: Created out of whole cloth in the late 1980s by father of China's economic miracle, Deng Xiao Ping, Shenzhen is itself virtually synonymous with success.

The much larger and less symbolic reason for taking China's experiment seriously, however, is the country's urgent need to reduce air pollution, which largely arises from the same sources that have sent its greenhouse gas emissions through the ceiling. The state of the air in China's major cities and industrial zones already represents a national health emergency and could easily flash into a full blown political crisis. Credible estimates suggest that more than a million Chinese are dying annually from exposure to air pollution. For the sake of protecting their precious newborn children, the country's best and brightest talk seriously of leaving China for points healthier abroad. A prestigious international school in Beijing has spent five million dollars to create an air-filtered gymnasium in which its pupils can work out on days deemed too dangerous for outside play by monitors safely ensconced in the U.S embassy.

In the end it may be true, as cynics suggest, that the Shenzhen trial is too limited in scope and the permits are too generous for there to be any real difference. But it may also turn out to be the case that here again the Chinese are doing what they have done so often before, copying best practices abroad and doing that so well that a real leap forward is achieved.

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Smokey the AI

Smart image analysis algorithms, fed by cameras carried by drones and ground vehicles, can help power companies prevent forest fires

7 min read
Smokey the AI

The 2021 Dixie Fire in northern California is suspected of being caused by Pacific Gas & Electric's equipment. The fire is the second-largest in California history.

Robyn Beck/AFP/Getty Images

The 2020 fire season in the United States was the worst in at least 70 years, with some 4 million hectares burned on the west coast alone. These West Coast fires killed at least 37 people, destroyed hundreds of structures, caused nearly US $20 billion in damage, and filled the air with smoke that threatened the health of millions of people. And this was on top of a 2018 fire season that burned more than 700,000 hectares of land in California, and a 2019-to-2020 wildfire season in Australia that torched nearly 18 million hectares.

While some of these fires started from human carelessness—or arson—far too many were sparked and spread by the electrical power infrastructure and power lines. The California Department of Forestry and Fire Protection (Cal Fire) calculates that nearly 100,000 burned hectares of those 2018 California fires were the fault of the electric power infrastructure, including the devastating Camp Fire, which wiped out most of the town of Paradise. And in July of this year, Pacific Gas & Electric indicated that blown fuses on one of its utility poles may have sparked the Dixie Fire, which burned nearly 400,000 hectares.

Until these recent disasters, most people, even those living in vulnerable areas, didn't give much thought to the fire risk from the electrical infrastructure. Power companies trim trees and inspect lines on a regular—if not particularly frequent—basis.

However, the frequency of these inspections has changed little over the years, even though climate change is causing drier and hotter weather conditions that lead up to more intense wildfires. In addition, many key electrical components are beyond their shelf lives, including insulators, transformers, arrestors, and splices that are more than 40 years old. Many transmission towers, most built for a 40-year lifespan, are entering their final decade.

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