Business

Experts: Beijing on target for low-carbon economy

By Ariel Tung (China Daily)
Updated: 2010-12-21 10:55

NEW YORK - China is set to move toward a low carbon economy, experts at the 2nd US-China Low-Carbon Economy Conference in New York said.

The annual event, which has brought together key officials from NYSE Blue, BlueNext, China Beijing Environment Exchange and other energy experts, had discussed how China and the United States can work together to reduce emissions globally.

Brian Storms, chairman and CEO of NYSE Blue, said China will have a tremendous progress in emissions reductions in the next 12 to 18 months.

Nevertheless, said Wu Changhua, Greater China director of the Climate Group, there will be a lot of work ahead for China.

"In its next Five-Year Plan (2010-2015) , China wants to transform its economic structure. It has sent a clear signal during the Cancun talks that its government and people are ready to go into a low-carbon economy. Low carbon is already infused in its young generation," Wu said.

Ivan Zelenko, head of derivatives and structural finance of World Bank, commended China's 12th Five-Year Plan to develop carbon market and impose carbon tax.

China is trying to set market mechanism to encourage polluters to slow their growth of carbon-dioxide emissions. Companies will be asked to reduce carbon emissions per yuan of profit earned, rather than providing them with hard targets.

The government could levy a carbon tax on enterprises and further boost prices of fossil fuel for the next five years as an incentive to cut greenhouse gas emissions and help realize green targets,.

Emilie Mazzacurati, who heads Point Carbon's North American research team where she focuses on climate policy and market analysis, said she believes carbon tax will be the most efficient way to curb emissions.

"China is going to build a market mechanism for carbon. Market mechanism will be more effective than shutting down the power plants. China has shown its commitment to reducing emissions," she said.

"But in the US, it will not happen in the next two years, not at the federal level. There's little interest in the carbon tax. But I believe carbon market mechanism will be the way for China and the US eventually."

Experts do not see a rosy outlook in US emissions reduction until 2013.

California will launch a carbon market in 2012 but growth will be slow as the financial crisis has pushed emissions down, Reuters reports.

Chelsea Henderson Maxwell, a former senior adviser on energy and climate change to Senator John Warner, said legislation is needed to deal with climate change.

"Nevertheless, I believe the US will keep its 2020 commitment," she said.

This year, the Congress failed to pass a climate bill that would have included new limits on carbon-dioxide pollution from factories, utilities and vehicles, as well as a goal to cut US carbon emissions 17 percent by 2020 from 2005 levels.

The US promise of a 17 percent reduction was met with criticism from many countries which noted that it amounts only to a 4 percent cut from the benchmark 1990 pollution level used by most countries.

Experts said it is unlikely that any firm cap on US emissions will become law in the next two years either.

Milo Sjardin, head of analysis of North America Bloomberg New Energy Finance, said the US will not meet its goal of 17 percent emissions reduction by 2020 although its emissions will be reduced.

"Like other countries, the US is reducing emissions independently," he said.

"On a domestic level, every country is doing something, but that's not enough."

Sjardin believed that over time, the US and China will be pushed to work together in tackling the climate change.

China Daily