China’s regulators have proposed cutting carbon allowances as the government seeks to raise the cost of pollution on its fledgling market for trading emissions, according to a draft of the plan viewed by Bloomberg.

The existing quotas have been quite lenient to polluters, creating a surplus of allowances that has weighed on prices. Tightening the quotas so soon after the national market was launched in July suggests that Beijing is keen to step-up the role of carbon trading to help meet its promise of peaking emissions by 2030 and getting to net-zero by 2060.

Guest post from Bloomberg