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J. Zhou and S. Chang
First, Beijing learned valuable experience from the EU emissions trading system.
The EU ETS phase I (2005–2007), for example, sectors covered by EU ETS
included energy supplies, oil refining, steel, building material and paper making;
phase II included electricity and heat production, steel, oil refining, chemical,
glass, ceramics, building materials (incl. cement), paper making and printing
(incl. pulp); and the third phase covered aviation, chemical, ammonia and
aluminum.
Second, it helps fulfill the central government’s pledge to curtail coal consumption in the Beijing-Tianjin-Hebei region and create synergy between PM2.5 and
smog control. As per the city’s Work Plan on Accelerating Coal Reduction and
Improving Air Quality, the total coal consumption in Beijing will be reduced to
less than 10 million tons by 2020. Therefore, inclusion of the above sectors and
businesses in the scope of BJETS will prompt key emitters to actively renovate
their coal-fired boilers.
Third, by building carbon market, it helps curb total energy consumption by key
energy users in Beijing. The 2017 Energy Utilization Bulletin of Beijing’s Key
Energy Users shows that in 2017, there were 521 workplaces that consumed
5000 tons of coal equivalent (and above) in Beijing, including 173 key industrial
users and 348 non-key industrial users. Most key energy users also represent key
carbon emitters in the city, thus required mandatory participation in the emission
trading system. By limiting carbon emissions from these places, Beijing is on
right track to achieve its goal of reducing energy intensity per unit of GDP by
the end of the 13th Five-Year Plan period.
2. Align with Beijing’s plan for industrial restructuring and optimization of its
energy mix when defining the emission control coefficient.
The methodology for determining emission control coefficient is: firstly, determine the ceiling of total carbon emissions from each sector/industry involved in
allowance allocation based on the statistical data of historical years, control target
or data in the planning of a given allocation period; then break down the emission
ceiling into two parts: allowance cap of the operational production capacity prior
to the allocation period and that of the allowed new production capacity during
the allocation period; finally, divide the allowance cap of operational capacity by
grandfather emissions (the average annual emissions in the historical base year)
to obtain the coefficient for varied sectors and industries.
3.3.1.4 Reinforced Safeguard for Compliance
Experience of carbon trading pilot suggests that such factors as the legal system and
policy enforcement bear considerable impact on the compliance rate.
1. Put carbon trading on a higher legislation level by imposing government
penalties on the violations of enterprises under the scheme in order to deter
non-compliance.
In the absence of host law support, if the pilot is only regulated by general documents without forceful legislation by the National or Local People’s Congress,
J. Zhou and S. Chang
First, Beijing learned valuable experience from the EU emissions trading system.
The EU ETS phase I (2005–2007), for example, sectors covered by EU ETS
included energy supplies, oil refining, steel, building material and paper making;
phase II included electricity and heat production, steel, oil refining, chemical,
glass, ceramics, building materials (incl. cement), paper making and printing
(incl. pulp); and the third phase covered aviation, chemical, ammonia and
aluminum.
Second, it helps fulfill the central government’s pledge to curtail coal consumption in the Beijing-Tianjin-Hebei region and create synergy between PM2.5 and
smog control. As per the city’s Work Plan on Accelerating Coal Reduction and
Improving Air Quality, the total coal consumption in Beijing will be reduced to
less than 10 million tons by 2020. Therefore, inclusion of the above sectors and
businesses in the scope of BJETS will prompt key emitters to actively renovate
their coal-fired boilers.
Third, by building carbon market, it helps curb total energy consumption by key
energy users in Beijing. The 2017 Energy Utilization Bulletin of Beijing’s Key
Energy Users shows that in 2017, there were 521 workplaces that consumed
5000 tons of coal equivalent (and above) in Beijing, including 173 key industrial
users and 348 non-key industrial users. Most key energy users also represent key
carbon emitters in the city, thus required mandatory participation in the emission
trading system. By limiting carbon emissions from these places, Beijing is on
right track to achieve its goal of reducing energy intensity per unit of GDP by
the end of the 13th Five-Year Plan period.
2. Align with Beijing’s plan for industrial restructuring and optimization of its
energy mix when defining the emission control coefficient.
The methodology for determining emission control coefficient is: firstly, determine the ceiling of total carbon emissions from each sector/industry involved in
allowance allocation based on the statistical data of historical years, control target
or data in the planning of a given allocation period; then break down the emission
ceiling into two parts: allowance cap of the operational production capacity prior
to the allocation period and that of the allowed new production capacity during
the allocation period; finally, divide the allowance cap of operational capacity by
grandfather emissions (the average annual emissions in the historical base year)
to obtain the coefficient for varied sectors and industries.
3.3.1.4 Reinforced Safeguard for Compliance
Experience of carbon trading pilot suggests that such factors as the legal system and
policy enforcement bear considerable impact on the compliance rate.
1. Put carbon trading on a higher legislation level by imposing government
penalties on the violations of enterprises under the scheme in order to deter
non-compliance.
In the absence of host law support, if the pilot is only regulated by general documents without forceful legislation by the National or Local People’s Congress,