… Shanghai to follow by the end of the month. If successful during the coming years, the Shenzhen and Shanghai ETS will provide valuable experiences that can be used by other mega-cities and countries.

The schemes are two out of seven pilot schemes selected by the Chinese central government to try out various approaches to tackle fast raising greenhouse gas emissions with private-sector mechanisms. China’s emissions intensity target (carbon dioxide emissions/GDP) of 17% reduction by 2015 from 2010 levels is broken down to cities and regions. Shenzhen for example will have to meet an emissions intensity reduction target of 21 per cent.

“The schemes are expected to be oversupplied in the beginning but – like with the European ETS and earlier pilots such as the UK ETS in 2000 – the importance is to get the institutions in place and the companies to start building their internal capacity to handle monitoring reporting and verifications” says Susanne Häfeli-Hestvik, MD of Tricorona Climate Partner. “Whereas it is absolutely paramount to reduce our emissions here in Europe as much as possible, we need to support countries like China in their quest to reduce their emissions massively. Otherwise, China alone is forecast to emit two thirds of the remaining emissions budget until 2050″