Recently, China has announced a guideline focused on optimizing the system for market-driven allocation of resources and environmental elements. This initiative is part of the broader efforts to expedite the nation's green transition within its economic and social frameworks, and it has been jointly released by the General Office of the Communist Party of China Central Committee and the General Office of the State Council.
The guideline details strategies for deepening reforms related to trading in resources and environmental elements. These strategies include enhancing quota allocation systems, broadening the range of tradable assets, fortifying trading mechanisms, and bolstering foundational structures. By 2027, the objective is to establish well-functioning trading frameworks for carbon emission rights and water usage rights, along with refining the trading of pollutant discharge rights.
Moreover, the guideline emphasizes the planned enhancement of market-based energy-saving mechanisms, leading to a more active trading environment for resource and environmental factors, supported by improved price determination processes. Given China's challenges with resource scarcity and limited environmental capacity, officials from the National Development and Reform Commission highlight the significant progress made through market-oriented methods.
China has already laid the groundwork with a national carbon market, a voluntary market for greenhouse gas emissions reduction, and a water rights trading platform, alongside various local pilot programs to promote market-based resource allocation. The new guideline is expected to facilitate orderly resources and environmental flows towards sustainable and low-carbon development and support the emergence of high-quality productive capabilities.
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