Economic Herald:

Can you tell us more about the construction of national carbon emission trading market? Are there any problems to be addressed? What about the next steps? Thank you.

Zhao Yingmin:

Let's invite Mr. Li to answer your questions.

Li Gao:

Thanks, Mr. Zhao, and thank you for your questions. The construction of national carbon emission trading market has attracted widespread attention. We have made some progress in recent years, especially since the newly established Ministry of Ecology and Environment (MEE) began taking on the duties to address climate change after its restructuring. The leading Party group of the MEE places great emphasis on the work to address climate change, and is now taking the initiative to promote it.

The construction of national carbon emission trading market is very complex. It is a major institutional innovation to control and reduce greenhouse gas emissions as well as promote green and low-carbon development through a market mechanism. We drew on both the experience and lessons from international carbon markets in the past years, and also accumulated experience through piloting projects in the country. On this basis, we decided to launch a national carbon emission trading market.

Since the institutional restructuring, we have been pushing forward with the building of national carbon emission trading market at a steady pace according to the requirements specified in our construction plan. Our progress is mainly as follows:

First, in terms of institutional development, we drafted and improved interim regulations on carbon emission trading, laying a legal foundation for carbon trading. In the drafting process, we solicited opinions from the public, companies, local governments and industrial organizations. We are also working on the formulation of supporting regulations, including regulations on the reporting and management of greenhouse gas emissions by key emitters, on the verification of emissions and on the supervision of the trading market. The regulatory documents are very important for market operation.

Second, in terms of technical specification, we organized the reporting and verification of the 2018 carbon emissions and the formulation of monitoring plans. We also improved the technical plans for quota allocation in the power generation industry. In addition, we required provinces and municipalities to make a list of key emitters in the industry, thereby promoting market construction in technical terms.

Third, in terms of infrastructure construction, we invited experts to evaluate the original plan for the national registration system and carbon emission trading system. We will revise this plan according to their opinions, and then, construct the systems, which will be a large step forward in the development of national carbon market.

Fourth, in terms of capacity building, we have also made a series of efforts. After the restructuring, the MEE began taking on duties to address climate change, and local ecology and environment authorities began undertaking work on carbon trading. Considering that the authorities and power generation companies may lack relevant experience, we launched large-scale training sessions to help them in capacity building.

Despite learning from the experience of international carbon markets and pilot projects, we still find the construction complex and challenging. In particular, we are designing and operating the market when China is still seeing an increase in its carbon emissions. In that regard, our challenges are different from what the European Union or California, in the United States, faced as they were developing their carbon markets. Therefore, we need institutional innovations based on China's national conditions and realities to ensure a good start and a stable and effective operation of the carbon market.

Next, we will step up our efforts in the following important areas. We will accelerate the formulation of supporting regulations, including regulations on the reporting and management of greenhouse gas emissions by key emitters, on the verification of emissions and on the supervision of the trading market. In doing so, we aim to establish a complete regulatory system, and lay a legal foundation for market operation. Meanwhile, we will release a plan for the total amount and quota allocation of nationwide carbon emissions, a fundamental but critical document for market construction and operation. As the construction will start from the power generation industry, we will release the technical guide for quota allocation in this industry to lay a solid foundation for developing the quota allocation system. The guide has been basically formulated now. We will also speed up the construction of the registration system and the trading system, identify key emitters in the power generation industry to be included in the carbon market, open accounts in the registration and trading systems, and make other preparations to implement carbon trading in the power generation industry.

Under the leadership of the leading Party group of the MEE and the support of government departments, industries and companies, we have confidence in the steady construction, initiation and operation of the carbon market. We also believe that the market mechanism will play its role in controlling and reducing greenhouse gas emissions and achieve a more cost-efficient reduction in emissions. Thank you.