Shenzhen Is First in China With June Start for Emissions Trading

Shenzhen, a Special Economic Zone designed to promote market policies in China, will begin emissions trading on June 17, the first announced start date among the country’s regional carbon exchanges.

Mayor Qin Xu announced the schedule in an interview with the Shenzhen Daily newspaper. While Beijing and Shanghai may also start their carbon markets in June, Shenzhen is the first to set a specific date, according to analysts at Bloomberg New Energy Finance.

China, the world’s biggest emitter, has approved pilot programs to cap and trade emissions in seven manufacturing centers as part of its plan to reduce greenhouse gases per economic unit by as much as 45 percent before the end of the decade. The nation will regulate 800 million to 1 billion metric tons ofemissions by 2015 in the world’s biggest cap-and-trade program outside of Europe, New Energy Finance forecasts.

“This is a clear sign that Chinese carbon-trading regions are actually starting their programs, paving the way for more to begin this year,” said Milo Sjardin, the Singapore-based head of Asia-Pacific analysis for New Energy Finance.

Shenzhen will initially include 635 companies in its cap- and-trade program, Qin told the newspaper. Those companies discharged 31.7 million tons of greenhouse gases in 2010, 38 percent of the city’s total, according to New Energy Finance. Pilot programs for carbon trading are also scheduled to open this year in Guangdong, Tianjin, Chongqing and Hubei.

Former Chinese leader Deng Xiaoping chose Shenzhen in the 1970s as one of the nation’s proving grounds for market capitalism. That transformed a county of 30,000 people north of Hong Kong into one of China’s largest cities with a population of more than 11 million as of the 2010 census. Shenzhen is a financial center in South China and home to the Shenzhen Stock Exchange.

Emission allowances are set to trade on the China Shenzhen Emission Exchange, said Charlie Cao, a Beijing-based analyst at New Energy Finance. Allowances have already been allocated to Shenzhen emitters, and the exchange is exploring how to develop futures based on the permits, he said.

To contact the reporter on this story: Mike Anderson in Singapore at manderson34@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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