China will launch a Clean
Development Mechanism Fund (CDMF) in March to help finance climate
change projects, according to sources with the Ministry of
Finance.
Ju Kuilin, a senior official with the Ministry of
Finance, said the fund has been approved by the State Council, or
China's cabinet.
A group formed by seven authorities including the
National Development and Reform Commission and ministries of
finance, and science and technology will be responsible for
managing the fund.
The fund will collect some carbon credit transaction
income, donations from international financial organizations and
individuals as well as other sources approved by the State
Council.
According to Ju, the fund has got a US$6.4 million
loan from the World Bank, and Europe will pour in loans worth a
further 500 million euros.
The Chinese government had approved nearly 300 CDM
projects by the end of January this year, including wind power,
hydropower and landfill gas power generation. With all these
projects kicking off, the fund will absorb around US$2
billion.
Under the Kyoto Protocol that came into effect in
2005, 38 industrialized countries must reduce their greenhouse gas
emissions by an average of 5.2 percent below the 1990 levels,
during the period of 2008 to 2012.
The CDM is a market-based mechanism that allows these
countries to fulfill their emission reduction obligations at much
lower cost, by investing in clean energy projects in developing
countries such as China.
China and the United Nations
plan to set up a carbon trading exchange in Beijing, making the
city an important center for multi-billion-dollar trade in global
carbon credits.
China now accounts for one
third of the global carbon credits market, behind India. The UN
predicts that China will become the largest carbon credits provider
by 2012, covering 41 percent of the global market.
(Xinhua News Agency February 10, 2007)
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