China plans to launch a fund in March to help finance clean energy projects and to set up a global carbon credit trading exchange in Beijing, the official Xinhua news agency reported.
The Clean Development Mechanism (CDM) fund is to collect carbon credit transaction income and donations from international financial organizations and individuals, Xinhua said. The fund has received a US$6.4 million loan from the World Bank, while Europe is to provide loans worth 500 million euros (US$653.8 million), Xinhua quoted Ju Kuilin, a senior official with the Ministry of Finance, as saying.
China and the United Nations also plan to set up a carbon trading exchange in Beijing, “making the city an important center for multi-billion-dollar trade in global carbon credits,” Xinhua said.
The Kyoto Protocol on global warming sets rich countries’ emissions reductions targets through to 2012 but allows them to meet these by funding emissions cuts in poor countries. Buying carbon credits is considered cheaper than making domestic cuts.
China has dominated as a selling country, so far attracting approved investments to cut emissions through 2012 by some 300 million tons — U.N. data shows — worth more than 3 billion euros (US$3.9 billion).
Xinhua said the Chinese government had approved nearly 300 CDM projects by the end of January, including wind power, hydropower, and landfill gas power generation. When all of the projects take off, the fund will absorb about US$2 billion, Xinhua said.
The fund will be managed by a group formed by seven government authorities, including the National Development and Reform Commission, it said.
China now accounts for one-third of the global carbon credits market, behind India. The U.N. predicts China will become the largest carbon credits provider by 2012, covering 41 percent of the global market, according to Xinhua.