China Plans Carbon-trading Exchange, Brokerages To Reduce Emissions

7 Feb 2007 (TODAY)

China, on course to surpass the United States as the world's largest
emitter of carbon dioxide by 2009, will set up Asia's first carbon-credit
exchange and 12 brokerages to let companies invest in clean technology to
cut emissions.

The Beijing-based exchange and the brokers in western China, estimated to
cost US$1.7 million ($2.6 million) over three years, will be formed with
financial support by Arcelor Mittal, said the United Nations' China
coordinator Khalid Malik. The UN will certify the credits and aims to get
the system ready by summer, he said.

"Assisting China in its efforts to cope with the impact of global climate
change and to create more sustainable, less greenhouse-gas intensive
development paths is an important focus," Mr Malik said.

The UN is trying to help China, the world's fastest-growing major economy
and supplier of a third of global carbon credits, invest in cleaner
industrial technology. Global warming, caused by greenhouse gases
including carbon dioxide, may raise average world temperature by up to 6.4
degrees Celsius by the end of this century.

The world's most populous nation is unlikely to meet the government's
target of cutting the energy used to produce each unit of gross domestic
product by 20 per cent before the end of 2010, the International Energy
Agency said on Dec 4.

To cut pollution and boost efficiency, China will shut 60,000 megawatts of
electricity-generating capacity at smaller power plants by 2010, the
National Development and Reform Commission said on Feb 1.

The 1997 Kyoto Protocol lets companies in developed nations buy credits
from projects that reduce emissions in developing economies, where
cleaning up production processes is cheaper. Those credits can be sold in
carbon-trading systems like that of the European Union.

China, the world's fourth-largest economy, is a developing country under
the Kyoto Protocol, enabling it to voluntarily sell the credits to cut its
output of pollutants. China's Ministry of Science and Technology is
working with the UN and the Ministry of Commerce on the project.

- Bloomberg