Is China Taking the Lead on Clean Energy?

China announced an ambitious new plan to curb its carbon emissions, which will up the ante for climate policies in other major countries.

China will launch the world’s largest cap and trade program for carbon emissions, according to a joint statement from the U.S. and Chinese presidents made on Friday, September 25. Once it launches in 2017, the program will complement the U.S. Clean Power Plan to cut down carbon emissions. Both countries hope these plans will lead the way to a global agreement at the Paris climate negotiations in December.

China is currently ranked first among the world’s greatest producers of greenhouse gases, accounting for nearly 30 percent of global carbon emissions, so this new plan represents the country’s encouraging new attitude towards its environmental impact. The cap and trade program essentially puts a price tag on pollution by setting a strict limit on how much carbon dioxide can be released from burning fossil fuels. The government offers a limited number of credits that companies can bid on and trade amongst themselves for permission to pollute. The program will create a carbon market for electric power generation, steel, cement, and other industries responsible for its bulk greenhouse gas emissions. This new plan will be second in scale only to the European Union’s carbon trading program.

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China also has plans for a “green dispatch” system that will prioritize renewable sources for power generation — such as solar and wind power and more efficient fossil fuels — over high-carbon sources like coal. This approach will help meet China’s goal to get 20 percent of its electricity from renewables by 2030.

In addition to assuming a tougher stance on domestic policies, China will take advantage of its substantial influence over developing countries. The government has pledged to commit $3.1 billion to help developing countries combat climate change through public financing of green infrastructure.

The country’s recent transformation of its typically smog-obscured capital shows how much change can be enacted through strict regulation. In preparation for the parade celebrating the 70th anniversary of China’s victory in World War II, the government shut down its normal economic activities and banned 2.5 million cars from the roads for two weeks. By the day of the parade on September 3, the thick gray haze had completely cleared to reveal blue skies. And only a day after the restrictions were lifted, Beijing returned to its customary and deadly miasma.

These new carbon emissions policies will rely on financial incentives instead of strict regulations. But if China can similarly enforce its new programs on a nationwide scale, it just might relinquish its title as “world’s worst polluter” and achieve its goal to peak emissions before 2030. It looks like America will need to step up its game if it doesn’t want to replace China at the top of the list for greenhouse gas production. We can only hope that this friendly rivalry between the two countries will escalate into a race to turn the tide of climate change.