* Advisers, backed by city's mayor, drawing up rules for
* City plans binding CO2 caps on up to 300 major firms
* Scheme to trade CO2 permits could start next year
* Beijing intends to launch national carbon trading; timing
By Kathy Chen and Stian Reklev
BEIJING, Feb 18 Qingdao has become the latest
Chinese city to plan a market to reduce greenhouse gas
emissions, as a group of advisers backed by its mayor is
hammering out rules for an emissions trading scheme that could
start next year.
Qingdao, a city of 3 million people in northeastern Shandong
province with a GDP equal to that of Bangladesh, is a major
energy consumer as the local economy relies on heavy industry
In a bid to meet a target of cutting carbon emissions per
unit of GDP to 19-20 percent below 2010 levels by 2015, the city
now plans to impose binding CO2 caps on up to 300 of its biggest
companies and launch a market for trading CO2 permits.
"The political will is strong as the work is led by the
mayor," Wang Ke, the director of Renmin University's energy and
climate economics programme, told Reuters.
Wang is advising the Qingdao government on its climate
strategy and leads the work of designing rules for its carbon
market, which would launch next year if approved by the local
China's central government has picked seven key regions to
launch pilot carbon trading schemes with the intention of
setting up a national market as Beijing seeks to cut emissions
per unit of GDP by 40-45 percent from 2005 levels by 2020.
Beijing, Guangdong, Shanghai, Shenzhen and Tianjin have
launched markets, with Hubei province to follow next month and
Chongqing later this year.
But the exact launch date of a national market remains
unclear - most observers expect it to begin in 2019 or 2020 -
and Qingdao is the latest of a number of big-emitting regions
looking to create their own markets to deal with the twin
challenges of climate change and air pollution.
The central government is reluctant to appoint more official
pilot markets, but is happy to encourage other regions to set up
markets as it might gain them valuable experience when a
national scheme kicks in.
Hangzhou in Zhejiang province in July started trading energy
consumption permits, while Shenyang in northern Liaoning a few
months later launched a voluntary market for CO2 allowances.
Shandong's Jining city in August released a climate plan
proposing a city-wide emissions market.
Two months earlier, lawmakers in the major manufacturing
province Jiangsu said they might set up a similar market to help
modernise its big-emitting industries.
Setting up local markets is an easily accessible policy for
local governments that have been imposed mandatory emission
targets from Beijing but lack the authority to impose a carbon
tax or energy consumption cap locally, said Song Ranping at the
World Resources Institute in Beijing.
(Editing by Muralikumar Anantharaman)