China to start cap-and-trade system as part of climate change deal with U.S.

obama xi elp

China is preparing to announce plans to launch a national system to limit greenhouse gases and force industries to purchase pollution credits, Obama administration officials said.

Beijing plans to put a cap and trade system into place in 2017 as part of measures aimed to address climate change in cooperation with the U.S. and others. This move builds on the U.S.-China deal reached last year.

A joint statement to be released following Friday's summit between President Barack Obama and his Chinese counterpart Xi Jinping aims to flesh out how their two countries plan to achieve targets for cutting emissions set at a bilateral summit in Beijing last year.

The officials, who spoke on condition of anonymity so they wouldn't pre-empt China's official announcement, said it's hoped the announcement will give impetus to a broader global treaty on climate change at a Paris conference in December.

The announcement will also cover components of the cap-and-trade strategy, including the individual sectors covered under the plan, which range from power production to papermaking, the officials said. Those sectors produce "a substantial percentage of China's climate pollution," one official said.

This cap and trade scheme sets an annual limit on the amount of pollution that can be produced, then requires firms to obtain permission to pollute by purchasing credits from less polluting industries.

Other parts of China's announcement will include prioritizing low-carbon and efficient electricity production.

Under last year's groundbreaking agreement, Obama set a goal to cut U.S. emissions between 26 percent and 28 percent by 2025, compared with 2005 levels.

China, the world's biggest polluter, relies heavily on coal for power generation. It will set a target for its emissions to peak by about 2030 or earlier, after which they would then start falling. That marks an unprecedented step for Beijing, which has been reluctant to be boxed in on climate by the global community.

The European Union has also said it would cut its emissions 40 percent by 2030, compared with 1990 levels. Taken together, the U.S, China and the EU account for more than half of global emissions.

Friday's announcement will also commit Beijing and Washington to aligning their views on key negotiating positions at Paris, along with providing greater funding for research and development on low-carbon technologies and financial assistance to help poor countries build low-pollution infrastructure.

China, one of the world's biggest builders of infrastructure, will also offer a "very substantial financial commitment" to help poor nations transition to low-pollution technologies, the U.S. officials said, without releasing the exact figure.

Three decades of breakneck economic growth have left China's cities clogged in dense smog and sent cancer rates soaring. That's prompted it to drop its insistence that developed nations bear most of the responsibility for reducing carbon emissions, producing a rare area of cooperation with Washington.

Lu Kong, the spokesman for Xi's delegation, declined to discuss the joint statement, but said climate change was "an area where China and the U.S. could work together and we did make some good progress in our joint efforts.

"Maybe this time we could make further progress in demonstrating to the outside world at large that China and the U.S. are committed to further efforts in dealing with climate change in a comprehensive way," Lu said.

The U.S. Environmental Protection Agency in August released its Clean Power Plan, setting final state limits for power plant CO2 emissions by 2030. Some states will have to reduce their emissions by as much as 40 percent or more below 2005 levels.

Last year’s U.S.-China deal, as well as President Obama’s announced targets for CO2 reduction, brought out industry and Republican opposition. In November, U.S. Sen. Mitch McConnell, the Senate majority leader and representing coal-producer Kentucky, lambasted Obama’s attacks on coal-fired generation.

“Our economy can’t take the president’s ideological war on coal that will increase the squeeze on middle-class families and struggling miners,” McConnell said. “This unrealistic plan, that the president would dump on his successor, would ensure higher utility rates and far fewer jobs. The president said his policies were on the ballot, and the American people spoke up against them. It’s time for more listening, and less job-destroying red tape. Easing the burden already created by EPA regulations will continue to be a priority for me in the new Congress.”

Former EPA Administrator Carol M. Browner applauded the Chinese move toward cap and trade.

“This historic agreement is a concrete commitment from China to address carbon pollution and climate change. This plan to limit and put a price on carbon pollution and other climate pollution well positions China to take advantage of the opportunity created as economies move away from fossil fuels and develop cleaner sources of energy. With China’s commitment, opponents of climate action here in the U.S. are running out of excuses, unfortunately not as quickly as the earth is running out of time.”

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