China launches final CO2 exchange in Chongqing

China launched its seventh and final pilot carbon market in the city of Chongqing on Thursday.

China has pledged that by 2020 it will reduce its carbon intensity – the amount of CO2 produced per unit of economic growth – by 40-45 percent from 2005 levels. It has also promised to set up market mechanisms to help meet its targets.

The carbon market in Chongqing follows launches in Beijing, Tianjin, Shanghai, Shenzhen and the provinces of Hubei and Guangdong of schemes that force hundreds of local enterprises to buy permits to cover their emissions.

In a speech last week, Sun Cuihua, deputy director of the climate change office at the NDRC, said a national trading scheme should be ready for launch within three years. She, however, added that there was still a great deal of work to do, including the establishment of national standards.

Nearly 20,000 enterprises across the country have already received orders from the NDRC to report their greenhouse gas emissions starting this year.

China will probably create a separate nationwide scheme that will not be derived from the pilots, and Sun, the NDRC climate change office’s vice-director, hinted last week that this might be one of the options now being considered.

But, Shawn He, a lawyer with the Huamao & Guigu Law Firm in Beijing who specialises in carbon trading, disagreed. The pilots have legal force only until 2016, and if the NDRC creates a separate nationwide scheme, it would have to let the local schemes fall into abeyance to avoid a dual market. “I think some form of integration (of existing markets) is the most reasonable solution,” He said.