The country pledged to reduce its carbon emissions per unit of economic growth by 40 percent to 45 percent by 2020 based on 2005 levels.
Xie Zhenua, deputy director of the National Development and Reform Commission, headed a closed-door meeting with ministry officials, enterprises, environmental exchanges and think-tanks to discuss the implementation of a domestic carbon scheme.
“The consensus that a domestic carbon trading scheme is essential was reached, but a debate is still ongoing among experts and industries regarding what approach should be adopted,” an anonymous source told the newspaper.
The source added that efforts to reduce carbon emissions will be self-imposed and will not be included in ongoing international negotiations on a future climate treaty.
As a developing country, China is not legally bound to any responsibility to reduce carbon emissions, according to the basic principle set by the United Nations Framework Convention on Climate Change.
China implemented mostly administrative tools to meet its 20 percent energy intensity reduction target from 2006 to 2010. The country’s top 1,000 energy consumers signed contracts with the government to improve their energy efficiency.
However, these measures became too expensive to maintain due to the rising energy demand, said Tang Renhu, a discussion participant from the China Datang Corporation’s low-carbon center.
Thus, market-based carbon trading schemes will be a cost-effective supplement to administrative policies, Yu Jien, an independent policy observer, pointed out.
One proposal calls for a definite cap on carbon emissions in a particular area or industry, while another states that China can convert its carbon intensity target to some carbon-related allowances for trading schemes.
But Mr. Yu noted that creating a trading scheme that allocates the carbon-related emissions permits among enterprises fairly will require complicated work.
“My suggestion is that the number of participating enterprises should be limited, as the goal of pilot trading is to try out the rules and establish a mechanism especially suitable for China,” he said.
The government is also pondering rules that will guide voluntary carbon trade projects in the country, said Sun Cuihua, an official of the commission’s climate change department.
China finalized its first voluntary carbon trade in August 2009 with a Shanghai auto insurance company, which planned to purchase over 8,000 tons of carbon credits generated through a green commuting campaign during the Beijing Olympics in 2008.
