All of the central government departments have made a series of deployments so as to fulfill their responsibilities for carbon emissions reduction according to the 14th Five-Year Plan (2021-25). To peak emissions before 2030 and to realize carbon neutrality before 2060 entail systematic actions of not only governments at all levels, but also the whole of society and the market.
The country still has a lot to do to achieve these goals. For instance, its relevant laws, regulations and policies must be revised to pave the way for the restructuring of industries and the construction of a new clean energy system.
In vowing to create an innovation system for green technology and to launch a nationwide emissions trading market, the country will learn to fight in the process of fighting, and the revision of the legal and institutional systems will be carried out along with the adjustment of industries, energy consumption and technology research.
That puts higher requirements on lawmakers and policymakers as they have to demonstrate foresight when devising relevant laws and policies so that they constitute effective incentives and constraints to advance the country's green transition.
The crux is to give full play to the market so that it will automatically prompt more resources to flow to new energy and low carbon technology. The emissions trading market is a case in point as it will naturally stimulate enterprises to increase their inputs in fields related to emissions reduction, as they can profit from it. Which means emissions reduction will be transformed from a requirement of the authorities into a business practice.
The country now needs to make policies to boost the development of the finance sector so that more investors can participate in emissions trading.
The capital will inject vitality into the market, and also fund the cash-thirsty research and development of green technologies. It is estimated that China needs at least 100 trillion yuan ($15.33 trillion) to restructure its energy consumption portfolio over the next thirty years to meet the 2030 and 2060 objectives. But the input, if well spent, can generate more benefits in various forms.
Now is the time for the country to not only open the emissions trading market, but also encourage the development of green finance.