Shenzhen to Participate in the Carbon Trading Program
The China Shenzhen Emission Exchange in Nanshan will be doing a trial carbon trading program in June allowing six hundred industrial enterprises in the city will now be able to trade carbon emission credits.
Rights to100 million tons of carbon emission is allocated to 635 enterprises in the span of three years and is based on their previous emission and industrial added values. Enterprises that emit less that their allowed carbon emission can trade their remaining allowance in the carbon trading market thus creating a cap and trade system. Enterprises that exceed its allowance must buy credits in the market or will else they will be penalized.
Shenzhen is one of the seven cities that were designated as a pilot area for carbon emission trading together with Tianjin, Shanghai, Chong-qing and Beijing and provinces in Guangdong and Hubei. The vice secretary general of the Shenzhen Municipal Government Wu Delin stated that the majority if the carbon emissions in the city are indirect emissions coming for the energy and manufacturing industries. And they find it hard to identify the amount of carbon emitted by enterprises since there is no evaluation mechanism.
The government created a panel of 23 experts and formed a third party group and after six months of research, they were able to create the first set standards to quantify and check enterprises carbon emissions. The selected industrial enterprises to participate in the trial program will include the eight largest power plants and list companies. Implementing the carbon trading mechanism these enterprises might cut their carbon emissions by 32 percent by 2015.