MAC: Mines and Communities

China Cdm Growth Not Enough To Tackle Emission Rise

Published by MAC on 2007-02-09
Source: Planet Ark

China CDM Growth not Enough to Tackle Emission Rise

PlanetArk CHINA

9th February 2007

BEIJING - Beijing needs to clean up its power plants and start burying the carbon dioxide they pump out, as a booming trade in emissions cuts under Kyoto is dwarfed by a spiralling number of coal-burning stations, officials say.

The world's number two producer of greenhouse gases refuses to accept caps on emissions growth, but touts efficiency and renewable energy targets as a sign of its green credentials and has attracted a slew of investment under the Kyoto Protocol.

The Clean Development Mechanism (CDM) allows industrialised nation polluters that overshoot their own targets to fund projects in the developing world to make up the gap.

In the first nine months of 2006 over 60 percent of CDM credits came from China and such carbon trade is expected to funnel between US$6 and US$15 billion dollars a year into Asia, specialists at the Asian Development Bank say.

But China's emissions problems are so severe that even if it continues to suck in 60 percent of CDM cash it would not be enough to address the impact of a voracious appetite for power to fuel the country's double digit annual growth.

The International Energy Agency has warned that if China does not make fundamental shifts in how it powers its economy, it could overtake the United States as the world's top greenhouse gas emitter by 2009.

"We are not so ambitious that through CDM alone we can make such reductions... but perhaps emissions will not increase as estimated by the IEA," said Lu Xuedu, deputy director of the Office of Global Environmental Affairs, at a conference to launch a Beijing carbon exchange.

China is building power stations at an unprecedented rate, most of them coal-burning plants which contribute to smog and acid rain as well as global warming.

Last year alone China added over 100 gigawatts of new capacity -- approaching the 112 GW of France's entire installed power plant capacity as of 2004.

"The main issue is that coal is cheap, its the cheapest form (of generation) apart from hydro that they have," said Merrill Lynch analyst Joseph Jacobelli.


The head of the country's Coordination Committee on Climate Change, Gao Guangsheng, told Reuters the country was exploring whether it could use CDMs to fund clean-ups at the country's large coal-burning power stations.

Under current rules coal burning stations are not eligible for credits though in theory they could qualify for efficiency upgrades, or conversions to cleaner fuels such as gas, said one CDM expert.

Assuming hundreds of countries around the world can agree to extend Kyoto beyond 2012, then new rules may allow the CDM to fund carbon capture and storage, where coal plant carbon emissions are buried underground.

In addition, Beijing wants to spread around CDM cash -- until now focused on curbing emissions at big industrial plants -- and that way spark a grassroots revolution which could yield more action. "If we can do this not just in one or two places but in the whole country, emissions reductions will be much larger than just for industrialised gas projects," said Lu.

It will do this through a CDM tariff, and a joint programme with the United Nations to foster smaller projects, as well as by launching a carbon exchange to boost the market for credits from small producers.

"This programme aims to improve the ability of poorer areas in developing and registering CDM projects, which have not been so involved so far," said climate change chief Gao.

Story by Emma Graham-Harrison


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