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China Beijing Environmental Exchange (CBEEX) is a corporate domestic and international environmental equity public trading platform initiated by the China Beijing Equity Exchange (CBEX) and authorized by the Beijing municipal government.
A lot of environmental policies proposed by China come in response to the dangerous amount of emissions, especially from Carbon dioxide, their main greenhouse gas emitter. In 1980, China emitted less than 1.5 gigatons (Gt) of Carbon dioxide per capita from fossil fuels.[ citation needed ] Over the next 20 years, in conjunction with the economic reforms under Deng Xiaoping's rule, CO2 emissions rose by about 4% each year to around 3 Gts. per capita. From 2000 to 2012, the CO2 emissions rate more than doubled, and China started emitting over 9 Gts. per capita each year. While the rate slowed down over the next few years due to changes in the economy and some climate reform, emissions once again shot up to keep up with the demand for Air Conditioners. The main source of this CO2 is from coal. While China's use of oil, cement, and gas each contributed to less than 2 Gts. since 1980, coal has been responsible for over 2 Gts. of CO2 emissions in 2000 and peaked at almost 8 Gts. in the early 2010s. [1] This mass production using coal dates back to the Seventh Five-Year Plan (1986–1990) where China's division of labor was based on what region specialized in. As a result, the provinces in the coastal central areas, which are more industrialized, were the main driving forces of China's economy. Particularly, the industries which use a lot of coal were the most successful, and coal consumption is often related to China's economic growth. Along with the economic growth rhetoric, other provinces, especially the undeveloped, started to adopt the industrial work ethic and along with it, more coal consumption. Unfortunately, because some of these underdeveloped provinces like Shaanxi and Sichuan do not specialize in industrial work, their production compared to central China is severely lacking when it comes to the economy. Therefore, there is an inefficient use of land resources, and with it, wasteful coal consumption. [2]
CO2 emissions via coal consumption became a big focus in China's eleventh five-year plan (2006–2010). A promise in this plan was to reduce emissions with respect to GDP by 20%. [2] One solution proposed was to establish the first Chinese emissions exchange in Tianjin in September 2008. By using the cap-and-trade model, the same molecules that created a climate crisis in China are the ones that will lead towards pollution reduction and environmental preservation while maintaining the growing Chinese economy. With the help of foreign exchanges such as the Chicago Climate Exchange and the European Climate Exchange (ECX), China had now become a major competitor in the Asian emissions market. [3] Shortly before this, China introduced the China Beijing Environmental Exchange (CBEEX) as a general market for environmental equities. It would also adapt the goals set up by the Tianjin Climate Exchange and fulfill the environmental goals of the eleventh five-year plan. [4]
Along with BlueNext and other companies, the CBEEX launched the first standard to combat greenhouse gas emissions, namely CO2 emissions, at the Copenhagen Convention in late 2009. [5] Its aim is to create new methods that support China through means environmentally, economically, legally, socially, and efficiently while giving full transparency and credibility within the Carbon market. They would achieve this by promoting the agriculture, forestry, and other land use sector (AFOLU) under the Clean Development Mechanism (CDM) to help the impoverished work under their projects and potentially scale to very efficient methods of a cleaner environment. [6]
There are four main project types in which companies can earn credits through the Panda Standard. Below are some examples of each type.
The first-ever transaction made under the Panda Standard came from Franshion Properties, affiliated with Sinochem Group, under the impression of gaining carbon neutrality. By trading with Yunnan Mengxiang Bamboo industry, Franshion Properties used 16,800 tons worth of voluntary emission reductions (VERs) to plant over 50,000 hectares of forests while developing the forest industry to decrease poverty in the areas worked. This transaction had other effects such as promoting the real estate industry for greener land and ownership. [6] [8]
In China's Twelfth Five-Year Plan (2011–2015), China wanted to further push for more environmental policies with a focus on lowering carbon emissions with respect to GDP by 17%, unlike the Eleventh Year Plan which wanted to decrease energy inefficiency overall. The plan also wanted to decrease the growth rate of GDP which posed an extra layer of difficulty in trying to lower emissions. Because of the Eleventh Five-Year plan's overall success, it proved a challenge to have smaller companies, most of which are working energy-efficient, follow suit. To achieve this goal, China looked into their old pillar industries and found new and improved industries that achieve the same product as the old, ones but are more environmental-friendly. An example of this is switching from coal to nuclear and solar energy. [9] China had mentioned a carbon trade market at the time of developing the Twelfth Five-Year plan, and this would be the idea of China's Emission Trading System (ETS), which consists of seven pilots, although there was no official carbon trading scheme until late 2017. [9] [10] Like carbon markets in general, firms are dependent on emission permits which are granted for keeping emissions low. Without them, they are severely limited in the market and must put in efforts to lower emissions to the threshold. Once businesses have permits, they can trade them in or with other firms for carbon credit. [11] The purpose of setting up ETS's was to control carbon emissions by reducing them and keeping them low while adapting to greener development without substantial damage to GDP growth. This, in turn, helps the air quality in a lot of cities, especially in Beijing, one of the pilots of the ETS which opened in late 2013. [10]
The Beijing ETS is based on the "1+1+N" policy. The first "1" sets the rules of their services, determines the jobs of all shareholders based on their specialty with respect to their rights, and the government watches over operations. All of these traits are found in the "Decision on Implementing C02 ETS in Beijing Document". The second "1" acts as the law of the ETS based on the "Interim Measures for the Management of Emissions Trading in Beijing" document where it gives clarification on the duties of each department and verifies all instruction and supervision within the carbon market. Finally, the "N" provides clarity and reminders to the first and second "1's". [10]
The job of the CBEEX is to enforce the integrity of all the values listed in the Beijing ETS. Its main focus is to provide stability in the capital and liquidity within the trading grounds and also keep track of all purchases to make sure each and every one of them is fair and backed by the public. As the manager of the trading platform, companies must be in accordance with the CBEEX so that transactions within the platform will be verified. [10]
There are two types of trading schemes allowed under the Beijing ETS: Beijing Emissions Allowance (BEA) and project-based offsets. The BEA is responsible for allowance allocation, and their currency is denoted tCO2 or total CO2. On the other hand, project-based offsets are responsible for regulating the Chinese Certified Emission Reductions (CCER), energy conservation projects, carbon sink projects, and Motor Vehicles Voluntary Emission Reduction. Unlike the BEA, the units used here are tCO2e, meaning tonnes of carbon dioxide equivalent. Under these schemes, trades can be online or in-person under the supervision of the CBEEX and its rules. For online trading, there are three types of orders one can make. First, are all-or-none orders where orders are met entirely or not at all. Second, are called sweep-to-fill orders where orders are grouped based on specific traits and orders are chosen based on the asking price. Third, are Limit orders where there is a set threshold price for a given product so that multiple companies can buy the same thing at the same price or higher. [10]
In 2017, the CBEEX, along with the European Energy Exchange (EEX), launched the official Carbon Trading Scheme. However, no trades were going to happen for quite some time. [12] Due to the huge influence in China's economy, China had the power to essentially control the price of Carbon through the markets. Along with the EEX as its partner, the CBEEX would be a huge influence on how carbon is traded locally, nationally, and internationally. [13] The focus this time revolved around thermal-fired power plants which are responsible for China's biggest resource consumption: coal. They are responsible for around 40% of China's carbon emissions. [11]
Trading did not actually happen until July 2021, when $32 million worth of carbon dioxide orders were made on the first day. The price started at 48 yuan per ton, but it soon increased. Due to the large amounts of capital equations to more than 2000 plants, totaling massive amounts of carbon emissions, this new scheme easily became the biggest Carbon market in the world. [12]
Not a lot of the functions in the old scheme do not apply in this new scheme. Unlike in the original emissions trading scheme, permits are based on emissions per unit of generation or carbon intensity, so there is no cap, although there is a threshold for these plants. [11] This is hinted at the trend of China's emissions rate going up through the 2010s decade. China pledged to reduce emission intensity by up to 65% by 2030, the same time they pledged to peak emissions. This was up from up to 45%, around the time when the Panda Standard was in the making. The claim focuses on emissions rate and not total emissions. [14] Since this new trading scheme focuses on thermal-powered plants, total emissions should go down because they are responsible for much of China's emissions; however, these rules do not apply to other plants that emit less. So it is theoretically possible for carbon emissions to go up if more plants are being built. [15]
The CCER was introduced during the ETS project but was shut down in 2017 due to low volume. The Chinese Certified Emission Reduction (CCER) plan helps achieve low-cost emission reduction and renewable energy targets as a complement to the Emissions Trading plan (ETS). CCER was another way firms could earn credit through means other than carbon. These included other greenhouse gases like methane and nitrous oxide, and this is often seen as another policy to keep emissions low. Now, with the introduction of the National Carbon Trading Scheme, CCER is planning to return in 2022 with more options for energy in hopes of having a much higher volume than before. Also, it has revamped its offset nature so that more firms will more than likely use this as the credit instead of the usual national carbon market. [16] Also in 2022, Beijing started plans for a center dedicated to the new CCER in hopes of emission costs being lowered and innovation towards greener technology. [17]
One of the common misconceptions of promoting greener policies is that economic growth would slow down by a lot. The problem here is that a huge economic halt is not achievable if a country's economic growth is not increasing at an increasing rate. This is the case in China where given the over billion population, it is hard to tell whether the economy is increasing or not if talked about altogether. It usually suffices that the economy in the main cities and provinces in China, namely the pilots of the ETS, are the determiners of how well the Chinese economy is. Even then, these pilots are really different from each other. For example, Beijing and Guangdong's populations differ by about 100 million people. Despite both cities having large amounts of people, there is a lot more variation in income in Guangdong. Furthermore, the specialties in Beijing differ from Guangdong because of their location, so their expected energy consumption will differ for those many reasons. As of 2014, Beijing's GDP per capita was 99,163 yuan compared to Guangdong's 63,258, but in terms of energy consumption and intensity, Beijing has a higher energy consumption but lower energy intensity. It is many variations like these that are the reason why measuring overall economic growth is extremely difficult. Therefore, it is ignored under these environmental policies. It is also because of this that each pilot's ETS is different and follows different policies and attempts to achieve different goals. [18] Out of the data, Guangdong showed the most economic loss while Beijing's losses were not as severe. This is because of the huge population that Guangdong is trying to convert to one single plan, and much of the loss of economic return comes from the loss of flexibility in Guangdong's original policy. Meanwhile, Beijing, with a lower population and the capital, adopted this change much better, and as a result, losses were not only minimal but soon gone after a few years. [19]
The most important goal of the first ETS was that China needed to lower carbon emissions with respect to GDP. From just the firms, there was a 16.7% decrease in carbon emissions in the first two years of operation. However, the bigger picture was that China needed to lower emissions altogether, so because production by means of coal was strictly limited, firms looked elsewhere, like production via natural gas. As a result, natural gas use increased; however, the total amount of emissions decreased. [20] Another thing that might have helped lowered emissions is that the carbon market was more political than economical. In a green market, where the economy is one of the top priorities, more often than not, this would fail since the economy would have to suffer for some time while greener technologies and practices are gradually being introduced. China's National Development and Reform Commission (NDRC) is responsible for balancing economic growth and greenhouse gas emission regulations, so it was assumed that the NDRC would put the climate crisis first while taking some consideration of the economy. [18] In terms of analyzing pilots individually, using the example of comparing Beijing and Guangdong, the capital Beijing showed the fastest market response since they were one of the first cities to implement the ETS while the populous Guangdong had the largest emission reduction. [19]
Throughout the 2020s, the main impact of the Seven-Pilots ETS from China's point of view would be the emergence and success of the National Carbon Trading Scheme. Given the experiment with the effects of different sectors across the different pilots with respect to the economic situation in their respective regions, China has had enough time to fully integrate their national carbon market, and potentially the biggest and most successful one in the world. As of 16 December 2021, the scheme only covered the electricity sector, the one that uses a lot of coal, so the result would be lowered carbon emissions through coal naturally, but possibly higher emissions in methane, SO2, etc. But this is part of China's long-term goals, and only time will tell if the successful integration of all sectors will be smooth, problematic, or might never happen. Given some success in the pilot stage, there is high optimism that the New Carbon Trading Scheme will find all the success. [21]
From July 2021 until now, the Chinese national carbon market is still relatively raw. In nature, this new scheme will have an impact on the economy, but it was made with political influence on the environment. However, there is no doubt that this new scheme provides efficiency. By controlling the price of carbon nationally, there is little unfairness when it comes to the open market. However, what efficiency cannot do is control the volume of trades in the market. A market can be running efficiently, but have its supply and/or demand change. This is predicted in the early 2020s when China's economy is going to increase, which implies more energy consumption. Because of the emission cuts with respect to the GDP promise, this defeats the purpose of trying to lower emissions, despite instating policies that say otherwise. [22]
In terms of calculating allowance allocation for each pilot, there are two main ways: grandfathering, which goes off on historical data, and benchmarking, which focuses more on efficiency and innovation today. [18] Other ways involve auctioning and relative performance mechanism (RPM). [23] In Beijing, grandfathering is used to keep track of existing sectors while benchmarking is used for newer ones. On the other hand, Guangdong uses benchmarking on electricity, cement, iron, and steel and grandfathering in the other sectors. [18] The problem here is that historical data is necessary to determine thresholds, but a lot of companies can simply inflate their numbers to get better numbers. As a result, actual emissions are often inaccurate because some firms have been inflated with undeserving quotas. For alternates to grandfathering, auctioning seemed to be the most efficient method of determining allocation limits because of the efficiency and fairness of bids. [23] From an economic point of view, inconsistent quotas often lead to fluctuating prices in the carbon market, and this results in changing electricity prices, and other sectors feel the effects, too. [24]
Since the Emissions Trading System is the first carbon platform, there are bound to be mistakes and loopholes. Also, since every pilot is different, carbon prices are very different. Moreover, since this was a new thing for its time, it was very hard to determine the future of carbon assets. Also, during the beginning of these ETSs, a lot of adjustments were made on the fly just to find an equilibrium in prices. Furthermore, the people in charge of running each pilot have little to no idea how to move forward with carbon prices, so they looked to other third parties like the local government for help. As a result, decision-making is often delayed and volatile. [18] Another problem arises in the nature of the Emissions Trading System. Because of its age again, prices are often too low compared to carbon markets in Europe. Due to Europe's support that started back when the CBEEX was established, China tried to copy off of them without the same resources. One of the main resources was knowledge rather than raw materials in the form of labor. The CBEEX's first transactions were made for the sake of making transactions. In other words, the start of this carbon trade was unorganized and just for the sole purpose of helping the environment. [23]
The biggest factor that determines the liquidity of carbon permits is the health of the market. If there is a low volume of trade, permits become harder to liquidate since few people are on the market. If there was a small market, to begin with, then the policies of that carbon market were on a disadvantage, to begin with. If the supply of carbon credit is running low, which causes an increase in prices, then this would tie into the volatility of the carbon price, and therefore, drastically change the liquidity of carbon. In other words, just like any other market, the Carbon market must have a healthy supply and demand, unlike most of the pilots in the ETS. In most cases, many pilots want only the best traders to use their services, and more often than not, their demands are very complicated. While the first few years may seem like a mess from the economic standpoint, it eventually recovered, and the eventual National Carbon Trading Scheme covers a lot of liquidity problems to just one single price. [24]
Another problem in liquidity also arises among pilots. With separate rules come separate values of Carbon credit. The advantages outweigh the disadvantages because carbon is not worth the same in all pilots. For example, around the start of the ETS, due to the high activity in Beijing, their price of carbon was 50.6 yuan per ton with the range from 30 to 77 yuan, compared to the very large Guangdong market going at 31.72 yuan per ton but ranged from single digits to 77 yuan per ton. Due to the sharp differences in prices, it is very hard for Beijing and Guangdong to be compatible with each other. Even though they are on different sides of China, there needs to be some sort of link between all seven knots, or else the liquidity of carbon would decrease. [18]
Policies come from legislation or a set of rules, and in theory, must be followed. Unfortunately, legislation for the ETS has been far behind. As a result, rules, monitoring, and enforcement were all outdated for their time. One legislation, the punishment was also outdated, meaning firms can actually get away with emitting a couple ones. This results in firms ambitiously emitting more for their economic gains. Out of the seven pilots, only Shenzhen has power over legislation, while the other six were working with old laws. This also affects the carbon market in a way that there is no correlation between punishment and carbon prices. Because of these confounding variables, it is hard to gauge if the current Carbon prices in each pilot are actually the most efficient ones. [23]
As of 2020, the China Beijing Environmental Exchange has been renamed the China Beijing Green Exchange (CBGEX). The carbon market in Beijing has remained strong with a turnover rate of over 2 billion yuan in 2021. Before then, numerous sectors have joined the carbon market, especially the Beijing Public Transport Group, which introduced cars with lower emissions along with policies that efficiently sets the game plan for cars on the road on a daily basis. [25] According to China's fourteenth five-year plan (2021–2025), carbon dioxide intensity would decrease by 18% and 13.5% for overall energy intensity. There was also the introduction of a carbon dioxide cap. Along with the National Carbon Trading Scheme, it would seem like China is on the road to fulfilling those promises. [26]
The Kyoto Protocol (Japanese: 京都議定書, Hepburn: Kyōto Giteisho) was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that global warming is occurring and that human-made CO2 emissions are driving it. The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. There were 192 parties (Canada withdrew from the protocol, effective December 2012) to the Protocol in 2020.
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). One prominent example is carbon emission trading for CO2 and other greenhouse gases which is a tool for climate change mitigation. Other schemes include sulfur dioxide and other pollutants.
The European Union Emissions Trading System is a carbon emission trading scheme that began in 2005 and is intended to lower greenhouse gas emissions in the EU. Cap and trade schemes limit emissions of specified pollutants over an area and allow companies to trade emissions rights within that area. The ETS covers around 45% of the EU's greenhouse gas emissions.
Flexible mechanisms, also sometimes known as Flexibility Mechanisms or Kyoto Mechanisms, refers to emissions trading, the Clean Development Mechanism and Joint Implementation. These are mechanisms defined under the Kyoto Protocol intended to lower the overall costs of achieving its emissions targets. These mechanisms enable Parties to achieve emission reductions or to remove carbon from the atmosphere cost-effectively in other countries. While the cost of limiting emissions varies considerably from region to region, the benefit for the atmosphere is in principle the same, wherever the action is taken.
Carbon pricing is a method for governments to mitigate climate change, in which a monetary cost is applied to greenhouse gas emissions in order to encourage polluters to reduce fossil fuel combustion, the main driver of climate change. A carbon price usually takes the form of a carbon tax, or an emissions trading scheme (ETS) that requires firms to purchase allowances to emit. The method is widely agreed to be an efficient policy for reducing greenhouse gas emissions. Carbon pricing seeks to address the economic problem that emissions of CO2 and other greenhouse gases are a negative externality – a detrimental product that is not charged for by any market.
The Carbon Pollution Reduction Scheme was a cap-and-trade emissions trading scheme for anthropogenic greenhouse gases proposed by the Rudd government, as part of its climate change policy, which had been due to commence in Australia in 2010. It marked a major change in the energy policy of Australia. The policy began to be formulated in April 2007, when the federal Labor Party was in Opposition and the six Labor-controlled states commissioned an independent review on energy policy, the Garnaut Climate Change Review, which published a number of reports. After Labor won the 2007 federal election and formed government, it published a Green Paper on climate change for discussion and comment. The Federal Treasury then modelled some of the financial and economic impacts of the proposed CPRS scheme.
China is both the world's largest energy consumer and the largest industrial country, and ensuring adequate energy supply to sustain economic growth has been a core concern of the Chinese Government since the founding of the People's Republic of China in 1949. Since the country's industrialization in the 1960s, China is currently the world's largest emitter of greenhouse gases, and coal in China is a major cause of global warming. However, from 2010 to 2015 China reduced energy consumption per unit of GDP by 18%, and CO2 emissions per unit of GDP by 20%. On a per-capita basis, China was only the world's 51st largest emitter of greenhouse gases in 2016. China is also the world's largest renewable energy producer, and the largest producer of hydroelectricity, solar power and wind power in the world. The energy policy of China is connected to its industrial policy, where the goals of China's industrial production dictate its energy demand managements.
A green-collar worker is a worker who is employed in an environmental sector of the economy. Environmental green-collar workers satisfy the demand for green development. Generally, they implement environmentally conscious design, policy, and technology to improve conservation and sustainability. Formal environmental regulations as well as informal social expectations are pushing many firms to seek professionals with expertise with environmental, energy efficiency, and clean renewable energy issues. They often seek to make their output more sustainable, and thus more favorable to public opinion, governmental regulation, and the Earth's ecology.
Professor Ross Garnaut led two climate change reviews, the first commencing in 2007 and the second in 2010.
Carbon emission trading (also called carbon market, emission trading scheme (ETS) or cap and trade) is a type of emissions trading scheme designed for carbon dioxide (CO2) and other greenhouse gases (GHGs). A form of carbon pricing, its purpose is to limit climate change by creating a market with limited allowances for emissions. Carbon emissions trading is a common method that countries use to attempt to meet their pledges under the Paris Agreement, with schemes operational in China, the European Union, and other countries.
The climate policy of China is to peak its greenhouse gas emissions before 2030 and to be carbon neutral before 2060. Due to the large buildout of solar power in China and burning of coal in China the energy policy of China is closely related to its climate policy. There is also policy to adapt to climate change. Ding Xuexiang represented China at the 2023 United Nations Climate Change Conference in 2023, and may be influential in setting climate policy.
Climate change is having major effects on the Chinese economy, society and the environment. China is the largest emitter of carbon dioxide, through an energy infrastructure heavily focused on coal. Other industries, such as a burgeoning construction industry and industrial manufacturing, contribute heavily to carbon emissions. However, like other developing countries, on a per-capita basis, China's carbon emissions are considerably less than countries like the United States. It has also been noted that higher-income countries have outsourced emissions-intensive industries to China. China is now the world's largest polluter and in 2023 recorded its hottest year on record with an average temperature of 10.7 C. On the basis of cumulative CO2 emissions measured from 1751 through to 2017, China is responsible for 13% globally and about half of the United States' cumulative emissions.
The Chinese national carbon trading scheme is an intensity-based trading system for carbon dioxide emissions by China, which started operating in 2021. This emission trading scheme (ETS) creates a carbon market where emitters can buy and sell emission credits. The scheme will allow carbon emitters to reduce emissions or purchase emission allowances from other emitters. Through this scheme, China will limit emissions while allowing economic freedom for emitters. China is the largest emitter of greenhouse gases (GHG) and many major Chinese cities have severe air pollution. The scheme is run by the Ministry of Ecology and Environment, which eventually plans to limit emissions from six of China's top carbon dioxide emitting industries. In 2021 it started with its power plants, and covers 40% of China's emissions, which is 15% of world emissions. China was able to gain experience in drafting and implementation of an ETS plan from the United Nations Framework Convention on Climate Change (UNFCCC), where China was part of the Clean Development Mechanism (CDM). China's national ETS is the largest of its kind, and will help China achieve its Nationally Determined Contribution (NDC) to the Paris Agreement. In July 2021, permits were being handed out for free rather than auctioned, and the market price per tonne of CO2e was around RMB 50, roughly half of the EU ETS and the UK ETS but better compared to the US, which has no formal cap-and-trade program.
Greenhouse gas emissions by Australia totalled 533 million tonnes CO2-equivalent based on greenhouse gas national inventory report data for 2019; representing per capita CO2e emissions of 21 tons, three times the global average. Coal was responsible for 30% of emissions. The national Greenhouse Gas Inventory estimates for the year to March 2021 were 494.2 million tonnes, which is 27.8 million tonnes, or 5.3%, lower than the previous year. It is 20.8% lower than in 2005. According to the government, the result reflects the decrease in transport emissions due to COVID-19 pandemic restrictions, reduced fugitive emissions, and reductions in emissions from electricity; however, there were increased greenhouse gas emissions from the land and agriculture sectors.
The milestones for carbon capture and storage show the lack of commercial scale development and implementation of CCS over the years since the first carbon tax was imposed.
The New Zealand Emissions Trading Scheme is an all-gases partial-coverage uncapped domestic emissions trading scheme that features price floors, forestry offsetting, free allocation and auctioning of emissions units.
The United Kingdom is committed to legally binding greenhouse gas emissions reduction targets of 34% by 2020 and 80% by 2050, compared to 1990 levels, as set out in the Climate Change Act 2008. Decarbonisation of electricity generation will form a major part of this reduction and is essential before other sectors of the economy can be successfully decarbonised.
A carbon pricing scheme in Australia was introduced by the Gillard Labor minority government in 2011 as the Clean Energy Act 2011 which came into effect on 1 July 2012. Emissions from companies subject to the scheme dropped 7% upon its introduction. As a result of being in place for such a short time, and because the then Opposition leader Tony Abbott indicated he intended to repeal "the carbon tax", regulated organizations responded rather weakly, with very few investments in emissions reductions being made. The scheme was repealed on 17 July 2014, backdated to 1 July 2014. In its place the Abbott government set up the Emission Reduction Fund in December 2014. Emissions thereafter resumed their growth evident before the tax.
China's greenhouse gas emissions are the largest of any country in the world both in production and consumption terms, and stem mainly from coal burning, including coal power, coal mining, and blast furnaces producing iron and steel. When measuring production-based emissions, China emitted over 14 gigatonnes (Gt) CO2eq of greenhouse gases in 2019, 27% of the world total. When measuring in consumption-based terms, which adds emissions associated with imported goods and extracts those associated with exported goods, China accounts for 13 gigatonnes (Gt) or 25% of global emissions. According to the Carbon Majors Database, Chinese state coal production alone accounts for 14% of historic global emissions.
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