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Chinese CO2 permits to trade below $5: consultant survey
November 7, 2013 / 12:25 PM / 4 years ago

Chinese CO2 permits to trade below $5: consultant survey

LONDON/BEIJING (Reuters) - Carbon emission permits in China’s fledgling CO2 markets will trade below $5 a ton in initial years, lower than the crisis-hit European market, a survey found on Thursday.

Consultancy Climate Bridge’s survey found companies expected trade to be hampered by a lack of regulation.

The world’s biggest-emitting nation, China is launching pilot markets in its regions as a first step to building a national emissions trading scheme to rein in its output of heat-trapping gases blamed for causing climate change.

But many of the rules and regulations of the markets have yet to be announced, and participants have little experience in monitoring, reporting and verifying emissions, the respondents said.

Climate Bridge surveyed 83 representatives from big-emitting companies, consultancies and academics on the development of carbon trading .

“The main barriers (to building a mature market) come from the disorder of the policy, rather than from the operation of the market,” the report said.

The Australia-based consultancy said carbon markets in China could develop quicker if regional governments announced clear rules for trading.

Eighty percent of respondents said trading of permits would be limited until 2015, while 75 percent said the price of Chinese emission permits would be 30 RMB ($4.92) or lower in early trades.

Of China’s seven planned regional pilot schemes, only Shenzhen has its market up and running, with Beijing, Guangdong and Shanghai scheduled to launch before the end of the year.

The survey respondents were optimistic about the longer-term development, with two-thirds saying they believed a national ETS would be launched between 2015 and 2020.

The majority said creating an all-China emissions market would give the government more clout in international climate change negotiations.

Reporting By Stian Reklev and Kathy Chen, editing by William Hardy

Our Standards:The Thomson Reuters Trust Principles.
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