In China, the UN's Clean Development Mechanism (CDM) -- which allows industrialized countries to offset their carbon emissions by investing in projects that cut emissions in developing countries -- is a boon for green companies, both domestic ones and the foreign firms that provide technology and services. Though China only has some 40 clean projects through the CDM, it controls the lion's share of the developing world's CDM's funds.
Now the government is hoping to divert some of the money pouring in for CDM projects into a state-owned fund, which officials say will be used to invest in more carbon cutting projects. All that's left is for the United Nations to give approval to a pipeline of 885 carbon-cutting Chinese business projects. Those projects (listed at this helpful government website) will cut China's greenhouse gas emissions by around 1.5 billion tons and result in an estimated $15 billion in carbon credits, $3 billion of which will go into the government fund. Since last year, the carbon credit market has tripled in size to be worth around $37 billion.
On one hand, diverting money into a government bureaucracy for this purpose, especially a Chinese one, sounds complicated at best. But continued government support for clean energy projects could go a long way in China, where there are few functional incentives for energy efficiency, much less incentives for renewable energy projects.
China has said it intends to spend an estimated US$200 billion on renewable energy over the next 15 years, partly to build hydropower, wind- and solar-powered plants to fuel its growth. (While in the past, the CDM emphasis in China has been on eliminating CFC-23, the ozone-depleting gas, the focus is turning toward energy efficiency, clean energy, and renewable energy sectors.)
But last week, it gave fresh signals that it would not agree to any binding carbon caps at next month's meeting in Indonesia to talk about replacing Kyoto. "Climate change is caused mainly by developed countries," Vice Foreign Minister Zhang Yesui said. "They should have the main responsibility for climate change and to reduce emissions."
He also suggested no agreement would be possible until after next year's US election. President George Bush's withdrawal of the US from Kyoto in 2001, with the abandonment of US climate targets, has been a major stumbling block to developing countries. "But by 2009-10, we might see light at the end of the tunnel," Professor Kiang said.
See also : : China Power Plans Biggest Corporate Renewables Investment, : : With Billions at Stake, China—Yes, China—Calls for a Better Kyoto Protocol, : : Record $1 Billion Emissions Reduction Purchase Made in China.
The Clean Tech Forum 2007 comes to Beijing December 3-4.
via Reuters: "China emission-cutting fund to reap up to $3 bln"
(Photo by bigmick)