A well-functioning carbon trading system could have profound impact on the future Chinese energy system together with other policy measures. The carbon trading system together with implementation of a nationwide electricity market can give strong incentives for further development and integration of renewable energy sources like hydropower, wind power and solar power.
Crucial for the long-term impact of the system is the detailed allocation mechanisms and the amount of emissions quotas available for the market. It is important that the system, also in the initial phase, creates the right economic incentives for an energy transition towards green and low-carbon technologies in order to allow for economic growth within the framework of an ecological civilization.
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The full CNREC – IIISD report on green revenues is now released. The report includes case stories from eight countries on how green revenues can be used to stimulate transition towards a more green energy system and point to the potential impact for China of such policy measures. Find the report here and a short wrap-up of the summary in my previous post.
CNREC and IISD looks at green revenues for green energy
Earmarked revenues from enviromental taxes could be one of the ways forward for China to ensure the needed subsidies for it’s ambitious development plans for renewables. The International Institute for Sustainable Development (IISD) and the China National Renewable Energy Centre (CNREC) are currently finalising a report on this issue, looking at best-practice examples from other countries and the implications for China.
Summary report on Green Revenues for Green Energy
The preliminary results of the analyses has been published in a summary report, and while we wait for the whole report to be ready, here are the key issues and findings:
1. Environmental taxes can be pro-growth and pro-competitiveness
2. Revenue stability can be ensured with adjustments, price caps and price floors
3. Revenues can promote renewables, as well as protecting the vulnerable, improving competitiveness and building policy acceptance
4. Policy stability increases leveraging of private finance
5. Multiple environmental fiscal policies, including taxes and trading schemes, can and do coexist in many countries
6. Renewable energy revenues need good management and governance if they are to achieve targeted objecives efficently.
These bullit points are explained in more detail in the summary report. Download it here!