Shenzhen May Add Cars To Its Carbon Trading Pilot Program Next Year

Bloomberg BNA — Car buyers in the southern city of Shenzhen could be required to purchase carbon quotas along with their vehicles as early as next year if the city's pilot carbon trading program is expanded, a city official said.

Shenzhen, which is among a half dozen areas of China that are experimenting with carbon trading, could add private vehicles and other parts of the transportation sector to the carbon trading mix as early as next year, Vice Mayor Tang Jie said June 11.

The China-Shenzhen Emissions Rights Exchange (CERX), which launched in June 2013, has so far covered only industrial emissions from 635 companies and 197 larger buildings. But speaking at a low-carbon forum in the city, which borders Hong Kong, Tang said, “We have to try to use a carbon finance approach to change the way people travel.”

While industrial emissions in Shenzhen have peaked and should drop by 2 to 3 percent annually in each of the coming five years, vehicle emissions will continue to grow as car ownership surges, Tang said. The transport sector now accounts for about 30 percent of the city's total emissions.

Buying Carbon Quotas With Car

The city is exploring the idea of requiring vehicle owners to purchase carbon quotas when they buy a car to cover future emissions, said Tang, who added that a typical car emits some 4.5 metric tons of carbon dioxide while traveling 22,000 kilometers (13,670 miles).

“If the owner has excess quotas, he or she might not drive as much as other users, then they can sell off the quota,” Tang said. “Such innovative ways could help people make money but also help in cutting carbon emissions.”

Tang said some 3 million vehicles are registered in Shenzhen, but that figure does not account for cars traveling from elsewhere in Guangdong province, or cross-border traffic from the Hong Kong Special Administrative Region.

A report on the first year of the Shenzhen trading platform released by the China South Low Carbon Academy June 10 said that the city would like to have industry, buildings and transport involved in the emissions trading system (ETS) by the end of 2015.

Potential for National ETS

Other speakers at the Shenzhen International Low Carbon City Forum suggested that trading had not been especially active in the six ETS pilots that have been launched so far in China, partly because companies are not fully prepared for the system. They also said rules for measuring, reporting and verifying emissions are not settled nationally.

But discussion of growing pains of the pilot projects came as a national official said the country hoped to use lessons learned from the pilots to launch a China-wide ETS by 2020 .

Other pilot programs are in Beijing, Shanghai, Tianjin, and the provinces of Guangdong and Hubei.

Chongqing's ETS, the last regional pilot project planned in China, launches June 19.

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