Group calls for independent supervision of carbon market
A climate change organization on Monday suggested Chinese policymakers establish a national regulatory commission for the country's fledging carbon market, noting that current plans call for setting up a national market within the decade.
To drum up the financing needed to contend with climate change, seven emissions trading systems are being tested out in China.
The National Development and Reform Commission, China's top economic planner, is now in charge of the systems, but an independent national regulatory commission will be needed when the market becomes more developed, said Wu Changhua, the Greater China director of the Climate Group, a non-governmental organization.
She called for a third-party supervisor to be established, noting the potential importance of China's carbon market.
Yet, she also said the task can be undertaken by an existing government supervision agency, such as the China Banking Regulatory Commission.
Climate financing is a fairly new idea. Because it will play an important role in China's attempts to cope with climate change, the government should regard climate financing as a national strategy, according to research conducted by the NGO and the research center for climate and energy finance under the China University of Finance and Economics.
The research suggested that China should set up a national climate change fund to support projects that are meant to reduce the harm caused by climate change and establish monitoring and assessment mechanisms for climate funds.
It also strongly suggested that the Ministry of Finance set up a special budget item for climate change, noting that budgetary money has been dispersed widely among various items. That has hindered efforts to concentrate resources on projects dealing with climate change, Wu said.
The regulatory commission should manage most capital arrangements relating to climate change, it said.
The central government invested more than 220 billion yuan ($34.9 billion) in energy savings, emissions reduction and the development of new energy sources between 2005 and 2010.
Tang Maoheng, chief product specialist at the corporate banking unit of the Bank of China Ltd, said private capital has already played an important role in China's new energy industries, such as the wind and solar industries, partly because of "green credits", which are another financing mechanism used in China to contend with climate change.
Wu said climate finance is an issue of international importance and is also essential for China to establish its own climate finance policies and management systems.
(China Daily 10/23/2012 page14)
