China Launches Experimental Market of CO2 Emissions

China, the largest emitter of carbon dioxide in the world, will launch a pilot program to establish a market for CO2 emissions and reduce greenhouse gases in the fight against climate change, the official Xinhua news agency said. The plan, presented by the vice chairman of the National Development and Reform Commission, Xie Zhenhua, including an increase of the difference in price between energy-intensive industries and the rest as well as tax benefits to energy conservation projects.

There will also be financial incentives for Chinese companies to invest in new energy in a country already leads the world in renewable energy investment. Similarly, “this will discourage excessive growth of energy-intensive sectors,” said Xie, the “number two” of the agency responsible for economic planning in China.

The Chinese government has set a goal of reducing between eight to 10 percent of the emissions in five years (2011-2015), as stated by the Chinese Prime Minister Wen Jiabao, in his presentation of the XII Five-Year Plan for the period, last March. At the same time, the second largest economy is set a goal of increasing to 11.4 percent non-fossil fuels as energy sources and reduce carbon intensity by 17 percent.