The city of Shenzhen in Guangdong province has launched the first carbon trading scheme of its kind in China.
According to media reports, more than 600 companies will take part in the pilot scheme (and 197 major public buildings) – covering 38% of the city’s overall emissions. The companies will be subject to a cap on their carbon emissions, with a requirement to buy carbon credits if they exceed their allowance.
Under the scheme, Shenzhen will have to reduce its carbon emissions by 21% between 2010 and 2015. Six other cities across China will also join the nationwide pilot programme. However, unlike many other cities in China, Shenzhen does not have any direct sources of emissions such as a chemical industry, steel or power plants.
"While the official list of covered companies is yet to be published, big names such as PetroChina, CNOOC, China Resources and Huawei will probably be covered, due to their business in the city, which has a population of over 10 million", said Hongliang Chai, analyst at Thomson Reuters Point Carbon.
"Despite market uncertainties, we forecast the covered companies will reduce total emissions due to such an ambitious intensity reduction target set by the government," continued Chai.