China’s carbon market to grow to $25 billion by 2030, Citi says

  • Date: 09-Mar-2021
  • Source: Emirates Business
  • Sector:Oil & Gas
  • Country:Middle East
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China’s carbon market to grow to $25 billion by 2030, Citi says

The size of China's carbon market will expand more than 30-fold over the next decade as it covers more industries and polluting becomes more expensive, according to Citigroup Inc. The market's physical turnover will rise from about $800 million this year, its first in operation, to around $25 billion by the end of the decade, analysts including Tracy Liao said in a March 8 note. The expected growth underscores both the massive potential of the emissions trading scheme, and the modest impact it's expected to have at the outset as the government seeks to ease companies into compliance. China's launch means that one-fifth of global emissions will now fall under a tax or trading scheme, according to Citi. At the same time, the pressure to cut emissions is likely to be inflationary and could leave Chinese factories more expensive relative to countries without controls, the bank said. "The Chinese national ETS as currently rolled out should play a limited role in reducing emissions at first," Liao said. "We expect a series of developments to transform China's ETS into the world's largest effective carbon trading scheme and a key building block of the country's 2030 peak emissions commitment." China made the