Editor’s note: The 2024 Smart Talks on Climate Change program, jointly organized by Yale Center Beijing and Yale Center for Carbon Capture, culminated in an essay competition where participants submitted essays on "What is a natural climate solution that you've noticed in your own personal context? How might inplementation of this solution at the local level have an impact on the global level?" This is a piece written by one of the winners of the 2024 essay competition.

Abstract

Inspired by the EU carbon market established in 2005 and supported by UNICEF, I successfully experimented with the carbon market mechanism across six high schools in Beijing. Participation rates gradually rose over two months, and in the last two weeks, we recorded 880 kilograms of carbon dioxide emission reduction by students. Meanwhile, I profoundly realized the issue of insufficient administration and coordination in carbon markets, a problem plaguing virtually all carbon markets worldwide. Taking a page from the successful formation of the WTO, I propose gradually merging regional carbon markets to form a unity. I will take my project and ideas to the COP29 in mid-November and call upon all governments and civilians alike to attach importance to this issue and reach a consensus.

Standing upon the proscenium before the executive director of UNICEF, Catherine Russell, the significance of my project finally hit me. I am presenting my “carbon credit in schools” project in the 2024 UNICEF “China Youth Climate Action” initiative. This project is a carbon market mechanism designed to record a school's and its students' carbon reduction activities and promote environment-friendly concepts. Functioning as a point-based system, it is structured with two levels: a primary market for inter-school carbon credit exchange and a secondary market for intra-school student and student group carbon credit acquisition and trading. In the process, I profoundly understood the consequences lack of coordination can cause to a carbon market.
High school students should generally have a higher participation rate than society since they are open-minded and constantly receive environmental education. However, few students wanted to look at our project plan, let alone participate. The cost of recording daily decarbonization actions easily outweighs the money awarded to the top-ranking students in decarbonization amounts. In fact, under current circumstances, it’s almost impossible to acquire sufficient funds to provide effective economic incentives, so I looked to school boards for help. After our school added this project to our science curriculum, participation frequency increased by 65%, and participation rate reached 46%, an all-time high. During the last two weeks, students from six schools generated 628 data pieces and recorded 88,093 carbon credits, equivalent to 880 kilograms of carbon dioxide emission reduction. The importance of a management organization and institutional framework over market members is intuitively shown in the context of schools.

This project is an essential first step in experimenting with the carbon market mechanism on a much smaller scale. Data from commercial, voluntary markets may only reflect low participation rates, but the reason behind it is not understood. With its small sample size, this project can effectively analyze each group of participants individually and understand their motives. Moreover, the subjects of this experiment are high school students who are in the crucial stage of education and will soon be taking on the responsibility of tackling climate change. A thorough understanding of their attitudes is undoubtedly helpful for future policies.

The international community is facing similar issues as well. Currently, carbon markets are severely fragmented, leading to carbon leakages. For instance, if a country imposes strict regulations, carbon prices will go up in that country, and companies will want to produce and pollute in countries that have lower carbon prices. In other words, when countries aren’t coordinated, a country setting strict regulations also severely hinders its economic development. For carbon markets to exhibit their full efficacy, a unified global market has to be formed.

Based on my experience initiating “ Carbon Credits in Schools” and the major legitimacy crisis in our international system, it is probably impossible for a single state to force the formation of a coordinated global carbon market. We are becoming multipolar. The leader of an international carbon market organization should possess prominent global status and be able to support the cause over a long period. The US, due to its democratic government, is, to a certain extent, unstable. Predictably, its policies will continue to swing back and forth as Democrats and Republicans alternate in the presidential position. Russia has lost considerable global influence since the war with Ukraine, and its economy is in tatters, so it is also an unlikely choice. China has limited experience with carbon markets. As a developing country and one of the biggest carbon emission countries, it isn’t confident it will even support such a cause shortly.

Thus, I look to the WTO for inspiration. The WTO, created on 1 January 1995, has significantly improved the flow of global trade in the past 30 years. Instead of having to undergo excruciating negotiations on every trade deal, countries now only have to enter this organization and follow a uniform set of rules. It started from regional markets and included 166 countries and 98% of global trade as of February 2024.  Perhaps we can also form a global carbon market organization by gradually merging existing regional markets into an international organization.

The progress in perfecting carbon markets reflects international recognition of the centerpiece role carbon markets can play in climate mitigation. With every entity having its best interests in mind, efforts have been fragmented up until now. My project and the current international effort imply the importance of an administrative organization with limited power over market members, and undoubtedly, much progress is still to be made. As history has shown countless times, when confronted by global catastrophes, humanity’s only path to survival is unity. 

World Trade Organization. “World Trade Organization - Global Trade.” Wto.org, 2019, www.wto.org.

At the time of submission, Baoxi Tang was a junior at the International Department of the Experimental High School affiliated to Beijing Normal University.