China may sell debt to combat climate change2014-04-03 10:53 China Daily Web Editor: qindexing
China may sell debt and is considering other ways to raise funds for combating climate change, an official at the country's top economic planner said on Tuesday.
"China is exploring and tapping bond markets," the official from the National Development and Reform Commission told a three-day climate conference in Beijing.
It was sponsored by the United Nations Foundation. Resolving problems associated with climate change will be one of the government's "top priorities this year," he said.
Other "innovative" methods to establish a financial market for climate change are being explored and the NDRC is in talks with the Finance Ministry to secure income for a special fund, the official, who declined to be named, said.
China, the world's biggest emitter of the greenhouse gasses blamed by some scientists for climate change, is ahead of some nations in its promotion of a market-based system to reduce pollution, experts said. The government, for example, is examining the urbanization program.
Also on Tuesday, China launched its carbon-trading market in the central Hubei province. The aim is to cap carbon dioxide emissions from nearly 140 of the biggest companies, each of which will be given a set amount of pollution permits. Unused allowances may be sold while companies exceeding pollution limits must purchase extra permits.
The first purchase was made by a subsidiary of China Petroleum & Chemical Corp in Hubei's capital Wuhan. It bought 50,000 tons of carbon dioxide emission quotas from a local utility at 21 yuan ($3.40) per ton.
The Hubei market is China's sixth of seven planned regional emissions trading schemes. The seventh exchange will be in the southwestern city of Chongqing, which is scheduled to start this year.
James Wright, an adviser from the United Nations Foundation, said China must get the right price for carbon to make the trading scheme work.
"It is all about setting the right price on carbon. If the price is too low, the system will break down and you don't drive the lower emissions fast enough," he said. "Seventy percent of energy being consumed is from coal. There is clearly a challenge to drive that down" if China is to tackle emissions.
Even with progress in those cities pioneering the cap-and-trade schemes, experts said it was only a first step to setting up carbon markets in different cities and provinces, and it takes time to develop into a nationwide system.
The NDRC said the seven pilot schemes will start integrating in 2015 and that an all-China platform will go into operation some time before 2020.