Lacking the money and technology to significantly reduce global warming emissions on its own, China plans to launch carbon trading with international partners this summer, officials said Tuesday.
The China exchange would aim to combine sales of carbon credits valid under the Kyoto climate treaty with a market in voluntary emissions reductions like those traded in Chicago, government and United Nations officials said.
“It is rather ambitious but we are targeting starting a pilot scheme this summer,” Khalid Malik, head of the U.N. office in Beijing, told reporters on the sidelines of a conference launching a new investment program in Beijing.
Under Kyoto’s Clean Development Mechanism rich countries can help meet their emissions targets by funding cuts in poor countries, getting carbon credits called Certified Emission Reductions in exchange.
China has kept a low profile in international debate about global warming, spurred by an U.N. report last week that said humans were to blame, but there is a growing sense of urgency as awareness grows about its vulnerability to droughts and floods.
“Responding to climate change is a strategic priority (for China),” Ju Kuilin, from the Ministry of Finance’s Department of International Cooperation, told the conference.
Separately, Qin Dahe, chief of the China Meteorological Administration, noted that China "lags behind Europe and the United States" in the technology needed to clean its coal, which accounts for 69 percent of its energy output.
The lack of technology to clean coal — so it can burn without producing as much pollution — is a serious problem because China is already the world's largest producer and consumer of coal, and is expected to surpass the United States as the world's largest greenhouse gas emitter in the next decade.
Qin said the central government already had set a "very ambitious and arduous goal" of reducing carbon dioxide and other emissions by 4 percent a year over the next five years.
However, China has no binding international commitments to reduce its emissions and failed to meet similar targets set by the government five years ago.
Shanghai without water?
A separate Chinese report released last month said climate change will harm China's ecology and economy in the coming decades, possibly causing large drops in agricultural output.
In the latter half of this century production of wheat, corn and rice in China will drop by as much as 37 percent, and the country's average temperatures would rise by 2 or 3 degrees Celsius in the next 50 to 80 years, the report said.
It also said evaporation rates for some inland rivers would increase by 15 percent. China already faces a severe water shortage, especially in the northern part of the country.
A British environmental expert said Monday that water shortages in China already were reaching "incredible" proportions, with Shanghai particularly vulnerable unless drastic action is taken quickly.
Justin Mundy, a government adviser on climate change, pointed to the current low levels of aquifers in Shanghai as a prime example of the problems China faces. Shanghai is going to have to use desalinized water in the next 10 years, then build the infrastructure to import water from Southwest China, he said.
"All the water in the southwest of China is fed by glacial melt," he said. "Glacial melt in about 25 years' time is not going to be there in anything like the capacity that is going to be required. What then, Shanghai?"