1. 2012-6-18 ICLEI Global Town Hall Workshop in Rio+20
“Emerging Local Cap-and-Trades”
China Local Carbon Trading
Piloting Scheme Introduction
2012-6-18
Changhua Wu

2. 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.

3. 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

4. Key Highlights 2
All 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

5. 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

6. 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

7. 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).

8. 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.

9. 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.

10. 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

11. 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.