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China Takes Over Carbon Market |
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By Antoaneta Bezlova - IPS/IFEJ*
The
Asian giant accounts for 60 percent of the global total of carbon
credits. More than 100 "clean development" projects are under way
in China.
BEIJING, Nov 27 (IPS/IFEJ) - China stands to
benefit from the booming global greenhouse gas market. Foreign investors
are flocking to pay Chinese energy companies and factories to reduce
pollution instead of spending far more to cut emissions at home.
Initially skeptical of the carbon trading market, worrying that
it allow richer nations to pay their way out of obligations to reduce
emissions under the 1997 Kyoto Protocol on climate change, China
has now come to embrace the system as an opportunity to attract
foreign investment in promoting energy efficiency and renewable
energy projects.
China currently accounts for 60 percent of carbon credits trading
under the Clean Development Mechanism (CDM) developed under the
Kyoto Protocol. Its dominant position in the thriving market represents
a big change from a few years back, when it had just five percent
of the contracted volume.
The CDM allows polluters in one country to earn credits by reducing
greenhouse gas emissions in another. Since global warming is a worldwide
phenomenon, the mechanism reasons, it does not matter where the
reductions actually occur. And because of the cost of implementing
reductions in developing countries is often cheaper than in industrialised
economies, polluters in the industrialized countries benefit from
credits through projects in countries such as China.
At the first Carbon Expo Asia -- a conference on emissions trading,
held in Beijing -- officials hailed the CDM as a win-win solution
between developed
and developing countries that could provide environmental investment
for free.
"Developed countries get opportunities to emit greenhouses gases
at a relatively low economic cost and achieve their emission reduction
targets, while developing countries get benefits such as funding
and technology transfer, which will boost their efforts to pursue
sustainable development," said Jiang Weixin, a senior official of
the National Development and Reform Commission.
Weixin spoke at the opening of the Expo, an event modeled after
an emissions-trading fair in Cologne, Germany. The choice of China
as a host underscored the country's growing importance in the global
emissions trade. The vast majority of CDM investment has been heading
to China, with India and Brazil also receiving big portions.
In the past, China has called for industrialized countries to take
more responsibility for reducing emissions. As a developing nation,
China is exempt from curbing its output of greenhouse gases under
the Kyoto Protocol. But as the benefits of international mechanisms
like CDM have become apparent, Beijing has welcomed the investment
and help it provides by streamlining its approval process and cutting
bureaucratic delays.
Since the United States -- the world's biggest emitter of greenhouse
gases -- has refused to accede to the terms of the Kyoto Protocol,
most of the potential buyers of carbon credits are from Europe and
Japan. The exemption also of rapidly developing economies such as
China and India from the reduction targets has prompted critics
to say that the current regime leaves the world's biggest polluters
outside the strict controls.
Despite the shortcomings of the climate change treaty, its core
mechanism --¬ carbon trading -- has proved to be resilient, and
of particular significance to China.
Beijing has approved 125 projects so far under the CDM, including
wind farms and hydropower generation, as well as chemical-pollutants
reduction projects.
These are expected to cut 630 million tons of carbon dioxide, ¬the
main gas contributing to global warming, by 2012, when the first
phase of the Protocol expires.
By then, some predict that China could be the main supplier of emission
trading units in the CDM market.
"It is possible because China is the biggest developing country,"
says Zhang Jianyu, from the Beijing office of Environmental Defense,
a U.S.-based group promoting emissions credits trading.
Three decades of breakneck industrial development have spurred China's
economic growth, but also spewed emissions that have polluted the
global environment. China now accounts for 14 percent of global
carbon dioxide emissions. It is also the biggest emitter of sulfur
dioxide, which causes acid rain.
Emissions from China and other rapidly growing economies in Asia
are also increasing faster than in other countries. According to
a World Bank report issued in May, China increased its greenhouse
gas emissions by 33 percent between 1992 and 2002, while India's
emissions grew 57 percent over the same period.
Despite the newly found enthusiasm for CDM among Chinese officials,
its future in China remains questionable, not the least because
of Beijing's own development plans.
Hit by acute power shortages in the past several years, the country
has embarked on a frenzied campaign to build more power plants.
Japan's Institute for Energy Economics predicts that by 2007, China
will have built an additional 200,000 megawatts of new power-generating
capacity, about 80 percent of which will be coal-fired.
This greater capacity is expected to contribute some 1.17 billion
tons of new carbon dioxide emissions by 2010. This whopping amount
would eat up a good portion of the targeted overall emission reductions
under the Kyoto Protocol of 5.5 billion tons of carbon dioxide over
the same period.
China already relies on coal for about 70 percent of its energy
supply. While aware of its high-polluting effects, Beijing has been
slow to diversify its energy sources or to increase energy efficiency.
Rocketing prices of oil and natural gas of late have made this even
more difficult.
A new report on confronting climate change ranked China near the
bottom of its index of 56 countries that were part of the 1992 United
Nations Convention on Climate Change. Released by the Climate Action
Network - Europe, the report ranked the United States at 53, with
only China, Malaysia and Saudi Arabia below it.
But Chinese officials defend Beijing's record on fighting climate
change. They point to Beijing's commitment to reduce energy consumption
by 20 percent and pollutants by 10 percent in the next five years.
* This story is part of a series of features
on sustainable development by IPS (Inter Press Service) and IFEJ
(International Federation of Environmental Journalists). |
