China says could add big-polluting regions to carbon market

BEIJING Wed Apr 30, 2014 1:05am EDT

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BEIJING (Reuters) - China is developing plans to expand its pilot carbon trading schemes into more of its key industrial regions, a top climate official said, as the country continues its drive to curb emissions.

China, the world's biggest emitter of climate-changing gases, has over the past 10 months launched pilot carbon markets in six cities and provinces with a view to rolling out a national market later in the decade.

But the government is already looking at plans to scale up the regional schemes, Su Wei, a senior climate official with the National Development and Reform Commission (NDRC), was cited as saying by state radio.

Su did not specify a timeline, but such steps would significantly broaden the reach of China's greenhouse gas regulations and bolster its role as the world's second biggest hub for emissions trading after the European Union.

The northern cities of Beijing and Tianjin currently operate separate carbon markets, but according to Su these could be linked together.

Hebei, a steel-producing province that is one of China's biggest polluters, could be added to the market along with the provinces of Inner Mongolia and Shanxi, Su said.

In the Yangtze River Delta, manufacturing hubs Jiangsu and Zhejiang could join Shanghai's CO2 market, while in the south, Guangxi, Hainan and other regions could link up to the Guangdong emissions trading scheme.

However, Su did not mention whether such expansions would be mandatory. A number of cities in eastern China, such as Hangzhou and Suzhou, have announced plans to set up their own CO2 markets.

The three regions identified by Su account for the majority of China's greenhouse gas emissions and have been banned by the central government from building new coal-fired power plants.

The country's worsening air quality has been near the top of the list of concerns of China's leaders, anxious to douse potential unrest as a more affluent urban population turns against a growth-at-all-costs economic model.

China has pledged to cut its greenhouse gas emissions per unit of GDP by 40 to 45 percent from 2005 levels by 2020, and is weighing options for a longer-term target to bring into U.N.-led climate negotiations.

Officials have said they aim to finalize a first draft plan for a national emissions market in October, but it remains unclear when it could be introduced.

(Reporting by Kathy Chen and Stian Reklev; Editing by Joseph Radford)

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