Two cities in China’s western Gansu province will set up a pilot carbon market as the province prepares for the launch of China’s national emissions trading scheme next year, local media reported Monday.
The cities of Jinchang and Jiuquan will study and implement a carbon market, according to local media reports citing the Gansu Science and Technology Department.
Through the pilot scheme, the province hopes to gain experience in collecting historical emissions data, allocate CO2 permits, build a carbon registry and carry out permit trading, the report said.
There was no information on when the market might start. The Gansu government gave its go ahead in December last year, the report said.
In its 2014-2020 climate change plan, released last month, the Gansu government said it aimed to cut its carbon intensity by 42% from 2005 levels by 2020, but the target for industrial emissions was set at 50%.
The plan also said Gansu aims to set up a carbon trading exchange, which can serve provincial trading in the national market.
The market in Jinchang and Jiuquan is unlikely to be big – the two cities are home to a total of around 2 million people in a province with China’s second-lowest per capita GDP – but is a sign some regional governments are stepping up efforts to prepare for the roll-out of the national ETS in the second half of 2016.
China’s carbon market regulator, the National Development and Reform Commission, has said the national ETS will gradually expand after the initial launch and be fully implemented by 2020, but it remains unclear how the market will look when it starts.
The seven established pilot schemes will be involved from the beginning, while other provinces will be allowed to choose whether they want to meet their emission targets by joining the ETS or using other policies.
It is not clear whether the existing and new pilot markets will continue to operate independently of each other but with common rules, if some of the pilots will merge into bigger regional schemes, or if there will be one unified national market from the outset.
A number of other cities are designing their own markets outside of the seven official pilot schemes, including Qingdao in Shandong province, and Hangzhou in Zhejiang,
In early February, media in Anhui province said officials at the Anhui Development and Reform Commission had proposed a pilot market after a delegation visited Shanghai, proposing to include power producers, cement plants, iron and steel manufacturers, and chemical firms.
By Stian Reklev – stian@carbon-pulse.com
