Page 142 - Low Carbon Development in China and India
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international carbon market provided to developing countries may be 2.2
substantially reduced. However, for China, the international carbon
market remains significant, because China is an important participant
in the CDM market and the largest carbon credit provider. Although
the scale of financing that the international carbon market could now
provide for China to develop the low carbon economy is a drop in the
bucket compared to its fund demand, yet the role of the CDM is not
only to provide climate funds for China, but also to facilitate smooth
development of infrastructures necessary for developing its domestic
carbon market.
Domestic Carbon Market
The domestic carbon market, as a market-based means, is of great
significance in raising low carbon development funds for the local
governments, forming long-term emission reduction mechanism, and
encouraging enterprises to participate in carbon emission reduction.
With positive actions by the Chinese government and support from
the international community, the National Development and Reform
Commission issued a notice at the end of October 2011, allowing
Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and
Shenzhen, to carry out carbon emissions trading pilot projects. The
pilot projects are actively exploring the mode for development of the
carbon market, but are all at a preliminary stage. Beijing, Shanghai, and
Guangdong launched their carbon emissions trading pilot projects on
March 28, 2012, August 16, 2012, and September 11, 2012, respectively.
Fiscal revenue from auction of carbon emissions quota can be used
as a significant source of funding for local governments and the central
government to develop a low carbon economy. However, as shown
in Box 2.5, these policies tend to take some time for adaptation and
transition, and will not bring significant fiscal revenue in the early
stages of implementation. Nevertheless, local governments and the
Central government should also have early consultations on use of the
fiscal revenue from auction of carbon emission quota so as to determine
allocation, management, and use of the revenue while pushing forward
the development of the carbon market piloting projects.
Chapter 2 Innovative Financing for Low Carbon Development 107
substantially reduced. However, for China, the international carbon
market remains significant, because China is an important participant
in the CDM market and the largest carbon credit provider. Although
the scale of financing that the international carbon market could now
provide for China to develop the low carbon economy is a drop in the
bucket compared to its fund demand, yet the role of the CDM is not
only to provide climate funds for China, but also to facilitate smooth
development of infrastructures necessary for developing its domestic
carbon market.
Domestic Carbon Market
The domestic carbon market, as a market-based means, is of great
significance in raising low carbon development funds for the local
governments, forming long-term emission reduction mechanism, and
encouraging enterprises to participate in carbon emission reduction.
With positive actions by the Chinese government and support from
the international community, the National Development and Reform
Commission issued a notice at the end of October 2011, allowing
Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and
Shenzhen, to carry out carbon emissions trading pilot projects. The
pilot projects are actively exploring the mode for development of the
carbon market, but are all at a preliminary stage. Beijing, Shanghai, and
Guangdong launched their carbon emissions trading pilot projects on
March 28, 2012, August 16, 2012, and September 11, 2012, respectively.
Fiscal revenue from auction of carbon emissions quota can be used
as a significant source of funding for local governments and the central
government to develop a low carbon economy. However, as shown
in Box 2.5, these policies tend to take some time for adaptation and
transition, and will not bring significant fiscal revenue in the early
stages of implementation. Nevertheless, local governments and the
Central government should also have early consultations on use of the
fiscal revenue from auction of carbon emission quota so as to determine
allocation, management, and use of the revenue while pushing forward
the development of the carbon market piloting projects.
Chapter 2 Innovative Financing for Low Carbon Development 107
