TheCompensators* » China and Australia agree on an Asia-Pacific Carbon Market

China and Australia agree on an Asia-Pacific Carbon Market

A growing concern of China and Australia of climate change has forged an alliance to reduce carbon emissions through an Asia-Pacific Carbon Market. On March 27, Australian and Chinese officials stated that both countries are working to develop their individual carbon trading markets as a first step towards an Asia-Pacific carbon market. The announcement was made by Greg Combet, the Australian Minister for Climate Change, Industry and Innovation, and H.E. Xie Zhenhua, the Vice Chairman of China’s National Development and Reform Commission at the Australia-China Ministerial Dialogue on Climate Change.

China is the world’s largest carbon emitter while Australia is the world’s highest per-capita carbon emitter among developed nations. The two countries have decided to cooperate in an attempt to limit carbon emissions. China aims to move to a national emissions trading scheme after the year 2015 while on their part, Australia has set a carbon price that will transition to an emissions trading scheme in 2015.

“In the future, we would like to work towards the development of an Asia-Pacific carbon market including major emerging economies like China and South Korea,” Mr Combet said. “This would expand coverage of the carbon market, provide more low-cost abatement opportunities and reduce the possibility of carbon leakage,” he added

On their own behalf, China has started to implement seven pilot projects that cover around one-third of China’s GDP and one-fifth of its energy use. The industrial powerhouse province of Guangdong, China launched its carbon market in September of 2012. The Guangdong scheme, for example, is expected to cover more than 800 companies that emit more than 20,000 tonnes of  CO2 a year across nine industries, including the energy-intensive steel and power sectors. The Guangdong scheme will regulate around 277 million tones of CO2 emissions by 2015. China will launch the six remaining schemes this year, in the province of Hubei and in the municipalities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen. Once up and running, these schemes will be linked to a nationwide scheme by the end of the decade; that would then be linked to other international carbon markets in the future.

China and Australia´s openness to the possibility of linking their carbon markets with other emissions trading schemes around the world is further evidence of growing international cooperation on climate change.

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