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China To Launch Energy Cap And Trade

China is planning trial efforts for an energy cap-and-trade scheme, applying market forces to its goals to reduce fossil fuel consumption and greenhouse gas pollution, the government said March 5.

The announcement added to evidence that China will focus on using broad energy consumption levers to pursue its goal of cutting carbon intensity, a measure of how much carbon dioxide – the main greenhouse gas from fossil fuels – is emitted to produce each unit of economic growth.

“We will carry out pilot programs on a cap-and-trade system for controlling overall energy consumption and trading energy savings,” said the National Developent and Reform Commission (NDRC) annual report, issued at the start of China’s annual parliamentary session.

“We will put in place a statistics and accounting system for greenhouse gas emissions,” the NDRC also said of its tasks for 2011.

China is the world’s biggest emitter of the greenhouse gases from human activity, and the embryonic cap-and-trade system will be part of the nation’s efforts to cut carbon intensity by 40-45 per cent by 2020 compared to 2005 levels.

Chinese Premier Wen Jiabao told the parliament that the country would cut energy intensity by 16 per cent and carbon intensity by 17 per cent by the end of 2015.

“We are keenly aware that we will have a serious problem in that our development is not yet well balanced, coordinated or sustainable,” Wen told the parliament.

He said “growing resource and environmental constraints are hindering growth.”



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