Finance
China’s Carbon Prices Could Plummet to Zero, Researcher Says
- TransitionZero says China market has excess carbon allowances
- Group uses satellites and AI to track power-plant performance
Photographer: Kevin Frayer/Getty Images
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China may be doling out too many emissions allowances at the start of its national carbon market, potentially causing prices to quickly crash to zero when trading begins later this year, according to new research.
A lax baseline for power plant efficiency will create a surplus of permits, meaning that even generators who pollute too much will be able to buy them cheaply and won’t have incentive to cut emissions, TransitionZero co-founder Matt Gray said.