Trading of Carbon Emission Rights：Guangzhou in Action

Entrepreneurs participated in the sidelines of the climate talks in Durban, South Africa, on Thursday to discuss China carbon trading and low carbon transition.

Chinese Government has committed that in 2020, carbon emission per unit of GDP in China will be less 40% to 45% than that in 2005.

“The control of carbon emission will inevitably lead to the problems in carbon emission gross control and quota trading,” said Li Zhengxi, president of Guangzhou Exchange Services Group.

In July 2010, National Development and Reform Commission (NDRC) issued Notice on Promotion of Low-carbon Areas and Low-carbon Pilot Program, which required pilot areas to research how to implement the objectives of cap-and-trade. There are 5 provinces and 8 cities as pilot areas, including Guangdong.

October 2010, Guangdong Province reported to NDRC the implementation plan on carrying out low-carbon pilot program. This plan proposed to pilot carbon dioxide emission gross control in the Pearl River Delta. At the same time, to explore the establishment of greenhouse gases emission control mechanism through government’s promotion and market-oriented operation, and establishment of carbon emission rights trading market are mentioned in this plan. October 2011, NDRC formally put forward Guangdong, Hubei, Beijing, Tianjin, Shanghai, Chongqing and Shenzhen as carbon emission rights trading pilot areas.

China has already been the largest carbon emitter. Estimated by the World Meteorological Organization, in 2008, Chinese greenhouse gas emission was 6.9 billion tons, accounting for 22% of the world's emission. According to experts’ prediction, greenhouse gas emission will be nearly 10 billion tons in China by 2020, likely accounting for 33% of the world's emission.

“Guangdong is the province with developed economy, but also with high energy consumption and carbon emission. As the essential national central city and regional center, Guangzhou is the main city of energy consumption and carbon emission in Guangdong,” added Li.

Guangzhou attaches great importance to the construction of low-carbon city and carbon emission rights trading market. November 2011, Guangdong Province determined to establish carbon emission exchange services in Guangzhou.

Guangzhou Carbon Emission Rights Exchange Services, invested 100 million RMB by Guangzhou Exchange Services Group (GZESG), will transact in Guangzhou Exchange Park. “We aim to found this institution by the end of 2011, launch the trading of voluntarily emission reduction in January 2012, and realize cap-and-trade in 2013,” said Li.

“We believe that the Pearl River Delta will be the first area to realize cap-and-trade in China,” added Li, “we are sincerely looking forward to the cooperation with exchange institutions, traders, experts and scholars, to promote the development of carbon emission rights trading market in China.”

Guangzhou Environmental Resources Exchange Services (GERES) was founded by GZESG in June 2009. GERES has carried out the methodology research in emission rights exchange about carbon, sulfur dioxide, chemical oxygen demand, nitrogen oxides and other major pollutants, as well as pilot of voluntarily emission reduction.