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China’s Emissions Trading May Spur Global Accord, Report Says

China’s Emissions Trading May Spur Global Accord, Report Says
The cooling towers of Huaneng Power International Inc.'s Gaobedian thermal power plant in Beijing, China, on July 30, 2012. The world’s second-biggest economy is scheduled to start emissions trading in seven manufacturing regions next year, and it may introduce a national system by 2015. Photographer: Nelson Ching/Bloomberg

Oct. 11 (Bloomberg) -- China, the world’s biggest emitter of greenhouse gases linked to climate change, may create the impetus for a global carbon market as it begins pilot trading programs, according to the Climate Institute.

“China’s emerging schemes can dovetail with other global schemes as a stepping stone towards a global climate change agreement by 2015,” John Connor, chief executive officer of the Sydney-based institute that commissioned a report released today, said in an e-mailed statement.

The world’s second-biggest economy is scheduled to start emissions trading in seven manufacturing regions next year, and it may introduce a national system by 2015. Shanghai and Guangdong plan to require producers of steel, petrochemicals and electricity and others with annual emissions of more than 20,000 metric tons to buy tradable permits. The other regions in China’s pilot program are Beijing, Tianjin, Chongqing, Shenzhen and Hubei.

The trial programs are part of the government’s efforts to cut emissions per unit of economic output by as much as 45 percent by the end of the decade compared with 2005 levels. China also aims to reduce the carbon intensity by as much as 17 percent in its five-year plan through 2015.

“Though covering a fraction of China’s total emissions, these pilots are expected to cover 700 million tons of CO2 emissions by 2014, compared with 382 million tons in Australia, 165 million tons in California and 2.1 billion tons in Europe,” Connor said.

Research Organization

The Climate Institute describes itself as an independent research organization funded by philanthropy seeking a zero-carbon global economy. The report was compiled by Climate Bridge, which describes itself as a multinational company that develops and implements emissions-reductions projects in Asia.

“China has long been perceived as a laggard on climate action, and used as scapegoat by other countries, like Australia, to delay action,” the institute said in the e-mailed statement. “But this argument is increasingly difficult, if not impossible, to make given China’s recent policies.”

Australian Prime Minister Julia Gillard implemented a carbon price on July 1, which opposition leader Tony Abbott has vowed to repeal should he win power in elections due by November 2013.

Her government passed amendments today in parliament’s lower house to revise the Clean Energy Act to allow linking Australia’s emissions trading scheme, due to start in 2015, with the one in the European Union’s. The revisions can now become law this year.

To contact Bloomberg News staff for this story: Jason Scott in Canberra at jscott14@bloomberg.net; Jing Yang in Shanghai at jyang251@bloomberg.net;

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

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