China Local Carbon Trading Piloting Scheme Introduction-Wu
2012-6-18 ICLEI Global Town Hall Workshop in Rio+20 “Emerging Local Cap-and-Trades”China Local Carbon TradingPiloting Scheme Introduction 2012-6-18 Changhua Wu
Background• 12th Five Year Plan (March 2011) Local carbon trading scheme was clearly specified• Notice of Guidance by NRDC (October 29,2011) NDRC issued a formal of those piloting schemes in accordance with the 12th• Purpose To explore how to apply market mechanism to achieve the emission reduction targets with relatively low costs.• Seven Local Units for Pilots Beijing, Tianjin, Shanghai, Shenzhen, Chongqing, Hubei Province and Guangdong Province.
Key Highlights of the Notice 1• All the seven piloting scheme governments shall pay high level of attention to this work by strengthening local organizational leadership; – Establish specially designated working group or task force – Allocate a designated fund/budget to implement the schemes – Speed up the work to compile implementation proposals of carbon emission trading – Specify the general framework, objectives, major tasks, guarantee measures, as well as timeline• All this info has to be submitted to NDRC for review and approval
Key Highlights 2All piloting regions• shall start study and stipulate their management method of carbon emissions trading piloting scheme• specify the piloting scheme’s basic principles,• forecast and confirm their regional total load control of GHG emissions• research and stipulate GHG emission allocation proposal,• establish local carbon trading oversight system and registration system,• cultivate and establish trading platforms,• build up carbon trading piloting supporting system,• guarantee the smooth progress of the trials
Progress• Beijing is the first to complete its proposal for NDRC to review and approval• Others are working on their own China Local Carbon Trading Piloting Scheme Introduction
Beijing• Government department in charge: DRC• Objectives: -Preparatory stage: 2011-2012, finish carbon trading trial proposal, registry inventory, the IT system for trading, trial management method, emission reporting system of major emitters -2013, officially kick off the trading -2015, basically complete the carbon emission trading market system that is applicable to Beijing• Trading Entities: All asset infrastructure enterprises with annual emissions at and above 10,000 tons in 2011-2012 are mandated to join while it is voluntary for others.• Key tasks of Beijing Environmental Exchange: -in-site trading rules and compilation of supporting documents -In-site electronic trading platform set up
Tianjin • The proposal is still under review.Chongqing • The proposal is to be submitted for review soon. • The key sectors that might be included in the trading pilot – aluminum electroplating, alloy, cement, iron and steel, among others (6).
Shenzhen• Shenzhen put forward a cap of 100 million tons per year, with the emission reduction tasks assigned to 3000 major enterprises, who will in turn become the major entities to trade.• The first stage is to focus on major enterprises (industrial), but also include commerce and trading enterprises, with buildings considered to be included too.• Starting in November of 2011, Shenzhen has been building up the infrastructure of carbon trading, including urban emission inventories and total emission load target, allocation of target to enterprises, as well as registration and management system.
Guangdong• Guangdong plans to start pilot trading next year. It takes the nationally assigned target of 18% reduction by 2015 and divide the efforts into four stages: -2011: preparatory work and also project-based voluntary emission trading -2013: start to explore quota-based carbon emission trading -2014: full scale carbon emission trading and explore to set up inter-provincial trading -2015: deepen emission trading, summarize the piloting scheme and process, and develop the 13th FYP carbon trading focus.
Shanghai • Targeted entities; -with certain level of emission -with relatively good historic data and statistics -independent legal entity that could take on civil responsibility -industries and industrial enterprises with an annual emissions at and above 10,000 tons per year -deviding enterprises into “trading circle” and “reporting circle” -16 sectors, 200 enterprises (of which 10 are industrial, non-industrial 6) • Stages of plan: -Phase I: 2012-2013, preparation period -Phase II: 2013-20145, trial trading, and at end of 2015 to link up with other markets in China -Phase III: 13th Five Year Plan period, nation-wide trading
Conclusion• China’s local carbon trade piloting is still very early stage, with lots of work to be done. Currently, all piloting cities and provinces are focused on infrastructure set up and piloting at focused scale as illustrated above.• There is still strong resistance from industries today, partly because this is piloting without necessary policy incentives or stronger driver to make changes.