中国温室气体自愿减排计划国际化展望（英）-36页_9mb

Summary of the Internationalization of China's Voluntary GHG Emission Reduction Program

Core Content

This report explores the potential for international cooperation on voluntary greenhouse gas (GHG) emission reduction under the Belt and Road Initiative (BRI), focusing on how China can leverage its existing voluntary emission reduction program (CCER program) to foster global carbon reduction efforts. It outlines the pathways for such cooperation, analyzes the demand and supply dynamics, and identifies challenges and recommendations for establishing a robust BRI carbon market.

Main Views and Key Information

1. Significance of BRI in Global Carbon Reduction

• Countries and regions along the BRI account for approximately 61% of global carbon emissions, making them a critical player in global climate action.
• China has already established strong cooperation with BRI countries on climate change.
• The BRI offers a strategic opportunity to advance global climate governance and decarbonization.

2. Voluntary Emission Reduction as an Entry Point

• Voluntary emission reduction (VER) cooperation is proposed as an initial entry point for carbon emission reduction collaboration between China and BRI countries.
• China launched the Voluntary GHG Emission Reduction Program (CCER program) in 2012, which has provided substantial experience in building and operating a voluntary carbon market.

3. Paris Agreement and Article 6 Mechanisms

• The Paris Agreement introduced new market mechanisms, particularly Article 6.2 and Article 6.4, to support international cooperation on emissions reduction.
• Article 6.2 facilitates bilateral or multilateral cooperation where emission reductions can be applied to NDCs or the voluntary carbon market.
• Article 6.4 is an international mechanism supervised by a specialized UN agency, aimed at encouraging public and private entities to participate in GHG mitigation.

4. Key Elements of the Cooperation Model

• Project Management Approach: A joint management body is formed under a bilateral agreement to oversee the development, registration, and trading of emission reductions.
• Registry Systems: Both China and the host country maintain their own emission reduction registries and implement registry security mechanisms.
• Trading Platforms: Emission reductions are traded on designated platforms, such as Guangzhou Emissions Exchange (CEEX).
• NDC Alignment: Emission reductions can count toward the Nationally Determined Contributions (NDCs) of both China and the host country.
• Third-Party Participation: If a third party is involved in project development, the generated emission reductions can only be registered in either China or the host country's registry.

5. Demand Channels for BRI Voluntary Emission Reductions

• Nationally Determined Contributions (NDCs): Countries aim to reduce emissions to meet the 1.5°C and 2°C temperature goals under the Paris Agreement.
• Compliance Carbon Markets: China’s pilot and national carbon markets allow for a 5% offset ratio, creating a demand for CCERs.
• Sector-Based Emission Reduction Mechanisms: Specific sectors, such as energy and industry, may use BRI emission reductions to meet their targets.
• Carbon Neutrality Goals: As countries pursue carbon neutrality, the demand for emission reductions will increase, especially from green finance initiatives.

6. Supply Potential for BRI Voluntary Emission Reductions

• Project Types: BRI countries may develop projects in energy efficiency, renewable energy, and carbon capture and storage (CCS) to generate emission reductions.
• Funding Support: Financial institutions, including national policy banks, international development banks, dedicated funds, and commercial banks, can provide support for BRI emission reduction projects.
• Existing Models: BRI countries have already initiated pilot projects, such as those in Thailand and Singapore, offering valuable insights into cooperation models and project implementation.

7. Challenges and Risks

• Singular Trading Models: Current carbon market structures may lack diversity and flexibility.
• Cross-Border Transfers: Issues such as settlements and transfer restrictions could hinder international cooperation.
• Imbalance in Supply and Demand: There may be a mismatch between the availability of emission reductions and the demand from international markets.
• Multidimensional Risks: Risks include regulatory, financial, and technical challenges that require careful management.

8. Recommendations

• Promote Innovative Models: Develop new and flexible cooperation frameworks that align with both national and international goals.
• Facilitate Cross-Border Factor Flows: Establish support systems to enable the smooth transfer of emissions reductions, technology, and finance.
• Improve Supply and Demand Matching: Enhance the availability and attractiveness of BRI emission reductions to meet global demand.
• Establish Synergistic Risk Prevention Mechanisms: Develop risk management systems to ensure the security and transparency of the BRI carbon market.

Key Entities and Initiatives

• Guangzhou Emissions Exchange (CEEX): A key platform for carbon trading in China, certified by the National Development and Reform Commission (NDRC).
• Environmental Defense Fund (EDF): A U.S.-based NGO working in China since 1991 to support low-carbon development through market mechanisms.
• Switzerland Compensation Project: A pilot under Article 6.2, involving 12 countries, including Thailand, to develop and trade emission reductions.
• Swedish Energy Agency (SEA): Conducts virtual pilot projects, such as a micro-grid PV project with Nigeria, to test the integration of emission reductions with green bonds.
• Joint Crediting Mechanism (JCM): A Japan-led mechanism used by Thailand to collaborate on emissions reduction projects.
• Silk Road Fund: Can serve as a platform for dedicated funding for BRI emission reduction projects.

Conclusion

The internationalization of China’s voluntary GHG emission reduction program offers a promising avenue for global carbon market development and climate governance. By leveraging existing mechanisms like the CCER program, China can support BRI countries in achieving their emissions reduction goals while also expanding its own carbon market. The report emphasizes the need for flexible and innovative cooperation models, secure registry systems, and effective risk management to ensure the success of this initiative.