Shanghai eyes personal carbon account to encourage low-carbon consumption


Shanghai’s Pudong New District will create personal carbon accounts for local citizens, according to a new local green finance rule entering into force on 1 July. The move aims to explore the emission-cutting potential of personal consumption and package such reductions as a type of carbon asset to be put into the country’s carbon market.

The scheme would allow users to save carbon credits gained for low-carbon behavior such as rubbish sorting and energy conservation, which could be exchanged for financial products and services.

According to the ordinance, the district would link such personal accounts to the city’s Tanpuhui platform, a system that focuses on public benefits from carbon emissions reduction and gives a type of verified carbon credit created by low-carbon consumer behavior. 

Tanpuhui has been piloted in a number of jurisdictions throughout the country since its debut in Guangdong in 2017. 

In the Tanpuhui system’s experiment in Guangdong, the Puhui Certified Emission Reductions (PHCER) generated by local citizens can be traded for commercial discounts or preferential public services. Companies can then employ PHCERs obtained from citizens as CCERs (China Certified Carbon Reductions, China’s national carbon credit) to offset up to 10% of their annual emissions.

Shanghai is still setting up such mechanism, with a public consultation working plan revealed in late March. It is expected that a system will be in place by 2023.

According to experts, one of the most difficult challenges in popularizing Tanpuhui is gathering data from individual consumers. In China, the popularity of smartphone-based e-commerce and digital payment may provide favorable conditions for gathering personal data indicative of users’ carbon emissions, but acquiring people’s consent and guaranteeing data security remains difficult. 

However, some argue that China’s mobile internet’s lack of privacy protection gives it an unrivaled advantage in pushing such consumer-generated carbon credits.

Another problem is developing adequate procedures for calculating reductions based on those data in order to confirm that the reduction claims are genuine and measurable. Before calculating a reduction, an emissions baseline for a personal activity must be established first.

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