China eyes blue skies with carbon tax plan

China is approaching climate change with a double whammy of an Emissions Trading Scheme launched in December and plans to bring in a carbon tax next.

China wants to make its skies blue again and a combined double whammy Emissions Trading Scheme and carbon tax is how they see it happening.

They're two ideas that have been controversial in Australia but for China, while it has been complex to develop, it was a simple decision.

Low carbon is the future, Jiang Kejun, a senior researcher at the Chinese government's Energy Research Institute, told AAP.

"This is a very strong signal to tell investors, otherwise investors don't know what's in the future, they only think about short term benefits," he said at an emissions reduction summit in Melbourne on Tuesday.

Businesses are on board with the ETS, officially expanded nationally in December as a follow-up to seven pilot programs running around the country.

Initially only applying to the electricity sector, it'll cover 1700 power companies and three billion tonnes of carbon, making it easily the world's biggest.

In contrast, the current largest ETS in the European Union applies over 31 countries and 11,000 heavy emitters, across multiple sectors, but only manages 1.4 billion tonnes of carbon.

Dr Jiang eventually sees the ETS covering eight sectors and seven billion tonnes of carbon but in the meantime a carbon price will help pull other sectors into line.

He concedes an ETS won't work for everybody and talked up the importance of subsidies for renewables, something China has seen a major jump in.

China expects solar energy to be competitive against coal without subsidies by 2020 and wind against coal by 2022, which means if investors head down the clean route it eventually negates the need for the ETS.

"China is very unique, the government is so strong, the government can do everything they want to do. It doesn't matter if people like it or not they just do that," he said.

"But for Australia or the United States I think a carbon pricing is still important, only in that case you also have subsidies for solar."

He believes Australia can lead the world into the low carbon scene with renewables.

"I think it's easier to be a very low carbon country - very big space, the sunshine so good," Dr Jiang said.

Published 2 May 2018 at 5:06am
Source: AAP