In May, a woman in Wuhan knocked CNY 90 (US$12.53) off her monthly mortgage repayment using a personal carbon-accounting app, Xinhua explained.
Wei Ying had accumulated the credits on an account run by the municipal government. Wuhan residents can gain points by using low-carbon modes of transport, with a bus trip garnering 212.5 grams of emissions reductions. Every kilometre on a subway gets 78.4 grams, and on a bike 93.3 grams. These credits can then be exchanged for coupons on taxis, groceries, shopping and, until the end of 2025, home mortgages.
Wei Ying needed 45,000 grams of credits to get that CNY 90 off her mortgage. With another 20,000 grams of credits, she got a discount on wine.
Such platforms are part of China’s “carbon inclusivity” sector, which incentivises individuals to tally low-carbon behaviours and convert them into a form of carbon credits. Xinhua promoted this carbon-account transaction as a step forward for the sector.
However, these platforms have faced major setbacks in the last few years. Since growing in popularity in 2022, small-scale use cases for personal carbon accounts were created, as developers anticipated a larger national-level rollout.
Use of such platforms to generate carbon offsets credits has been a point of contention, partly due to the difficulty of proving emissions have really been saved.
Ultimately, their exclusion from China’s voluntary carbon market last year deferred any near-term national-level programmes and put their future into question.
“
There’s no unified standard for calculating carbon points. For instance, a bike ride might earn you different points in Shenzhen compared to Hangzhou. This inconsistency hurts the credibility and comparability of the data.
He Guojun, economist, Hong Kong University Enterprise Sustainability Global Research Institute
The rise and fall of carbon accounts
China’s earliest personal carbon-accounting systems were started by the Guangzhou municipal government back in 2015. The following year, payment app Alipay launched Ant Forest, which directs users’ points toward reforestation projects. It remains the best-known platform for personal carbon accounting in China.
In 2022, the number of these systems grew from less than ten to more than 60, according to analyst Lu Leshu’s book Carbon Account. This rapid expansion turned China’s carbon-inclusivity sector into the world’s biggest experiment for developing personal carbon-accounting systems.
That expansion involved at least seven tech companies, including Tencent, Meituan and Alibaba, seven banks, two energy companies, 16 cities and four provinces, who all developed carbon-inclusivity platforms, with some interlinked.
“You could consider it the largest-scale and best-resourced implementation of personal carbon offsetting ever,” said Ouyang Cheng, director of Carbonstop Research Institute, a carbon-account consultancy.
He Guojun is an economist at Hong Kong University’s Enterprise Sustainability Global Research Institute. He says the boom came from a mix of policies after China announced, in 2020, its targets to peak carbon emissions before 2030 and reach carbon neutrality by 2060. Also key was the expectation that “carbon inclusivity” could be included in China’s voluntary carbon market, which at the time was pending re-launch, and would expand these initiatives as part of a national market.
Carbon inclusivity most commonly works through personal carbon accounts, where users can tally points for their “low-carbon behaviours”. This may include biking, recycling, avoiding food waste, buying low-carbon products or using sustainable food delivery.
They can then exchange the points on platforms that calculate carbon emissions saved by these behaviours, as over their conventional alternatives. The ultimate goal is to both raise environmental consciousness among the public and generate value via carbon offsets.
The number of carbon accounts shrunk significantly in 2024 when carbon inclusivity was left out of the carbon market, and the Ministry of Ecology and Environment declined to establish a regulation promoting it.
Today, they do still exist at the local government level and as services offered by specialised consultancies, including for corporations to develop in-house accounts for employees. Some carbon-accounting systems were even presented in 2024 at the COP29 climate summit in Baku, by the Wuhan municipal government and consultancy MioTech, among others.
Counting ‘low-carbon behaviours’
“Carbon inclusivity”, “carbon accounts”, “carbon welfare”. These are all terms that local governments, tech companies, factories, banks and airlines have used in China to describe carbon-accounting schemes for citizens, customers, employees.
Users can often record low-carbon behaviours either automatically through linked payment apps, by answering questionnaires, manually logging them, or submitting photo evidence. Then, the platform calculates associated emissions-reduction values and awards points that may be exchanged for discounts, gifts, donations or cash.
Proponents of carbon inclusivity say it is a powerful tool to expand public awareness of climate change and the need to reduce emissions, and that China’s digital infrastructure and government involvement in the private sector provide unique opportunities to realise emissions reductions.
He Guojun says personal carbon accounts are good for capturing everyday green behaviours like using public transport, which are often overlooked by corporate carbon markets.
Some carbon-inclusivity platforms have also focused on using these schemes to increase green consumerism.
Researchers have found “green nudges” on food delivery apps are effective in reducing waste, such as encouraging consumers to avoid single-use cutlery. But while there are several white papers from the government on the effectiveness of carbon inclusivity, there remains a lack of work on the issue by academic researchers.
Hurdles
Criticism of carbon accounting has pointed to flaws or inaccuracies in the methods used to calculate carbon offsets. Concerns around data and personal privacy have also been an issue.
“It’s easy to calculate the number of people who take buses and bikes,” journalist Yuan Jiaxi wrote in Chinese outlet Huxiu in 2024. “But it’s harder to calculate how many people originally wanted to drive but changed their minds because of the carbon-inclusivity incentive.”
If someone cycles to work every day, Yuan argued, and then starts logging these rides in a carbon account and getting points for them, what emissions exactly are being reduced?
These concerns around establishing baseline emissions and the “additionality” of emissions-reduction mechanisms are similar to concerns over carbon offsetting at larger scales. Concerns around double-counting across multiple accounts is also similar in both contexts.
Ouyang of Carbonstop Research Institute agrees, saying that the difficulty of establishing clear additionality makes carbon accounts ill-suited to the current requirements of the voluntary carbon market.
Exclusion from carbon market means no unified standards
In late 2023, it became apparent that carbon accounts would not be included as a way to generate carbon credits on China’s voluntary carbon market. The four project types supported by the market were instead: forestation projects, mangrove restoration, solar thermal power, and offshore-wind power generation.
Exclusion meant there would be no national standards for carbon-inclusivity projects, impacting the ability of the carbon-inclusivity sector to expand.
“There’s no unified standard for calculating carbon points,” said He, the economist. “For instance, a bike ride might earn you different points in Shenzhen compared to Hangzhou. This inconsistency hurts the credibility and comparability of the data.”
At China’s national Two Sessions meetings in Beijing in March 2024, Zhou Yunjie, CEO of appliance manufacturer Haier, submitted a proposal to formulate a law promoting carbon inclusivity. The Ministry of Ecology and Environment declined in August 2024, pointing to concerns around baselines and additionality, calculations and monitoring procedures, as well as the lack of a unified standard for calculating emissions reductions across platforms.
“Looking ahead, I think for carbon inclusivity to really succeed, policymakers need to create a national benchmark,” said He. “Right now, many cities are running their own pilots with different rules, which is inefficient and confusing.”
Since the number of carbon-inclusivity schemes greatly decreased in 2024, “right now, carbon-inclusion projects are being tested on a small scale, or remain at a theoretical stage”, said Mou Lei from Syntao, an ESG consultancy. “There are basically none being developed at a large scale.”
Green transportation remains the key use case
Ouyang said it is unlikely that carbon inclusivity will be included in the voluntary carbon market going forward. Still, his consultancy has worked with clients including international companies and domestic giants to provide personal carbon-accounting systems for employees.
Transportation has become one of the “core application scenarios for carbon accounts,” says Ouyang, as it is relatively simple to monitor how people get around and calculate the resulting carbon impact.
Points are awarded for both commuting and business travel, promoting train travel and using electric cars, and even economy-class train travel as it takes up less space than business class.
However, “many countries lack the digital infrastructure needed to support these programs properly, which makes it hard to integrate data smoothly”, said He.
Data transfer also presents a hurdle as it generates privacy concerns. “Both [local] governments and users worry about how their data is handled, which slows down adoption,” he added.
This article was originally published on Dialogue Earth under a Creative Commons licence.
