China’s carbon market can integrate with international markets through CCER
Ma Jun, President of the Institute of Finance and Sustainability
It is necessary to enhance the role of the carbon pricing mechanism, as once established, it can serve as a cost-effective and efficient tool for directing more resources toward green and low-carbon allocations. However, constructing the carbon market presents several challenges, one of which is how to maintain connectivity with the international market while aligning with global standards.
Regarding this issue, I believe that, in the short to medium term, China’s carbon market has the potential to integrate with international markets through Chinese Certified Emission Reductions (CCER). The international community has recognized the significant potential of CCER, as it may evolve into the largest voluntary carbon market worldwide. Consequently, there is considerable global interest in participating in it.
Nevertheless, two critical issues must be addressed: firstly, aligning China’s CCER standards with international ones. The most straightforward approach is to seek recognition from the Integrity Council for the Voluntary Carbon Market for China’s CCER market standards and methodologies, thereby making the CCER market acceptable to global investors. Secondly, mere acknowledgment of CCER’s quality is insufficient; there must be a trading channel for foreign individuals to easily acquire CCER products. Mechanisms like Stock Connect and Bond Connect could potentially serve as viable solutions.
