Setting an accurate price for carbon emissions could incentivize enterprises to work towards carbon neutrality while the national trading system is still nascent, said industrial experts at the Boao Forum for Asia Annual Conference 2022.
In order to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060, China has launched a national carbon market, regulated by the Ministry of Ecology and Environment and run by the Shanghai Environment and Energy Exchange.
The market has over 2,000 companies in the power generation sector and covers over 4.5 billion tonnes of carbon dioxide a year.
According to the Ministry of Ecology and Environment, the market is currently the world's largest carbon trading system, trailed by its European counterpart.
On the sidelines of the session "Towards Carbon Neutrality: Business Sector on the Move" on Wednesday, Liu Qiao, dean of Guanghua Management School, Peking University, said the nationwide carbon trading system is still in early stages and faces liquidity issues.
"We should have an accurate price for carbon emissions. If the companies do not have the incentive to really reduce carbon emissions, there's no point talking about new models or new technologies. So, carbon prices is probably the key thing," said Liu.
The panel discussion topped the forum's agenda and attendees talked about how enterprises should view carbon neutrality and what market rules should be in place to advance progress.
Companies will change their growth paradigm by adding carbon emissions to their production function, said Liu. He added that they should consider reducing carbon emissions as a positive move rather than additional costs. He also suggested financial markets to play a bigger role in helping the market grow in the future as it could rationalize carbon pricing.
Source: CGTN
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