Anne Zhang

    zhangy49@gmail.com

    EIGHT carbon-trading deals were made yesterday, selling more than 20,000 tons of carbon emission credits after the launch of Shenzhen’s carbon-trading market at Shenzhen International Low-Carbon City in Longgang District. The prices ranged from 28 yuan (US$4.4) per ton to 32 yuan per ton.

    Shenzhen Energy Group’s Dongbu Power Plant sold credits for 2,000 tons of emissions to Guangdong CNPC International Affairs Co. and Hanergy Holding Group, at prices of 28 yuan per ton and 30 yuan per ton, respectively, marking the first deals of its kind in China.

    Shenzhen is among seven cities and provinces in the nation that are designated as pilot areas for carbon-emission trading. Other cities include Beijing, Tianjin, Shanghai and Chongqing, along with Hubei and Guangdong provinces.

    Shenzhen took the lead in launching China’s first carbon-trading market — China Shenzhen Emission Exchange.

    The city selected 635 enterprises and 200 large public construction units to participate in the trial carbon-trading program. Rights to about 100 million tons of carbon emissions will be allocated to the 635 enterprises over the next three years, based on their previous emissions and industrial added values. Credits for 33.2 million tons of carbon emissions will be allocated through allowances to the enterprises this year alone.

    Participants that emit less than their allowance can trade the remainder through the carbon-trading market, creating a cap-and-trade system. If a firm’s emissions exceed its allowance, it must buy credits or face penalties.

    In addition to the participating enterprises, project owners involved in the Clean Development Mechanism — an international program that supports emission-reduction projects in developing countries — and investors who have opened accounts at China Shenzhen Emission Exchange will be able to conduct carbon trading, said Peggy Chen, president of the exchange.

    The sellers in the first eight deals were mandatory participants in the carbon program, and had all received allowances. Buyers included program participants and investors. Individuals and social groups also can buy carbon credits in the market to offset their carbon footprints. The amount they buy cannot be traded and will be taken from this year’s total allowances.

    Carbon trading is a form of emissions trading that specifically targets carbon dioxide and it currently constitutes the bulk of emissions trading.

    This form of permit trading is a common method countries utilize in order to meet their obligations specified by the Kyoto Protocol; namely the reduction of carbon emissions in an attempt to reduce future climate change.