China Not Ready for Emissions Trading

China will establish a national emissions trading system at some time in the future, the country's top climate negotiator said this week, but opportunities remain limited for now.

Xie Zhenhua, vice chairman of China's National Development and Reform Commission, said the country was a long way from capping its greenhouse gas emissions and trading emissions permits, according to newswire reports of his speech on Wednesday.

"As climate change accelerates, the range of policy measures taken by China will become increasingly strict, and emissions goals may become increasingly quantified.

"I'm sure China will open up trading in emissions permits. But this will require a certain length of time," Reuters reported him saying.

Xie noted that Beijing, Tianjin and Shanghai are launching pilot emissions trading programmes, but capping emissions nationally is not consistent with the country's economic growth aims.

"As a developing country, China faces more challenges than developed nations to control greenhouse gas emissions, since China has to boost economic growth, improve livelihoods and protect the environment at the same time," he said.

Xie said China has introduced a challenging target of reducing its emissions intensity - the amount of carbon dioxide emitted per unit of economic activity - by 40-45% by 2020 compared with 2005 levels.

"To achieve the 2020 target will need considerable effort, because the easiest problems were already dealt with in the 11th five-year plan, and in the 12th and 13th ones [to 2020] it will be more difficult," Xie said.

Some 83.3 billion yuan ($12.5 billion) will be spent on energy conservation and the environment this year to help meet the targets in the 11th plan (2006-10), which include cutting energy consumption per unit of GDP by 20%.

In the last four years, small thermal power plants with a total capacity of 60,000MW have been closed and the authorities have phased out millions of tonnes of inefficient production capacity in the steel and cement sectors.

Xie was speaking ahead of the Tianjin round of UN climate talks, which start next week.

By. Christopher Cundy

Source: Environmental Finance