China Carbon Price Limit Protects Market - Official
Date: 26-Oct-06
Country: CHINA
Under the Kyoto Protocol, developed countries can buy pollution cuts by companies in developing countries, and then count these towards their own greenhouse gas emissions targets.
The cuts in greenhouse gas emissions are sold in units per tonne of so-called carbon credits.
Although Beijing does not officially set a minimum level for the credits, it has refused to approve projects with prices below the unpublished guideline, which investors said was raised to 8 euros a tonne from 7 euros last month.
"If you say is there a floor price, I don't know how to answer. You could say yes, could say no," Lu Xuedu, deputy director at China's Office of Global Environmental Affairs, told a World Bank workshop in Beijing.
"We do ask for a minimum price but at different times it is at different levels ... The key point for this is that the government wishes to help maintain a stable international market. They don't wish to see it fluctuate."
China, which currently accounts for more than 40 percent of expected annual reduction credits, wanted to steer a course between prices too high to attract buyers and those too low to attract project managers, Lu said.
The World Bank estimates that around 14 percent of global greenhouse gas emissions come from China -- although the vast population means that it emits far less per person than industrialised nations such as Britain and France.
Lu also said that China did not expect to see many more of the projects to reduce emissions of HFC 23 -- a gas that has offered vast and easy profits because it has nearly 12,000 times the global warming potential of carbon dioxide.
"We do not encourage more HFC project," Lu said.
"We prefer to do more (projects) with development benefits that can alleviate poverty in areas like western China and we hope that we can see several hundred such projects in coming years," he added.
