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Top China think tank proposes greenhouse gas trading plan


Top China think tank proposes greenhouse gas trading plan
Updated: 2009-03-25   PrintMailA top Chinese State think tank has proposed a global greenhouse gas trading plan to reflect the different historic emissions of rich and poor nations, reflecting deepening discussion in the central government about climate change policy.

Researchers from the State Council Development Research Center, which advises China's leaders, laid out the plan in the March issue of the Economic Research Journal, a Chinese-language publication that reached subscribers this week.

The broad scheme is far from being government policy.

But it illustrates the growing focus of decision-makers on how China should handle climate change negotiations aiming to seal a new global pact by late 2009.

The China think tank plan seeks a solution to the divide between developed nations, with high per capita accumulations of greenhouse gas emissions, and developing nations, including China, with low levels of such emissions that are set to rise in coming decades.

The answer, they write, is to set emissions rights for each country, based on its historic accumulation, and then let nations trade portions of those rights in an international market.

"If every country's emissions rights can be clearly defined and strictly protected, and a corresponding mechanism for market transactions can be established, emissions reductions will become a form of behavior that offers a return," they write.

"This will provide a powerful impetus for developing low-carbon technology and a low-carbon economy."

The think tank's proposal would draw China and other poorer countries into clearer obligations to curtail greenhouse gases in the long term. But it would give their citizens larger emissions quotas than rich countries' populations, reflecting the developing world's low historic emissions and "right to develop".

Under the current Kyoto Protocol, the UN-backed pact governing countries' climate change obligations, China and other developing economies do not shoulder caps on greenhouse gases.

The United States previously cited China's lack of caps as one reason for Washington staying out of the Protocol's obligations. President Barack Obama is pushing Congress to develop a system that would cap greenhouse gas emissions and require that companies purchase permits to release such gases.

But his administration and other Western powers will still press China, India, Brazil and other big developing nations to offer clearer commitments in the successor pact to Kyoto, which negotiators hope to settle in Copenhagen in December.

The think tank researchers say their plan would help surmount the current Protocol's shortcomings, including its "narrow coverage and lack of incentives for developing countries".

Their plan says all countries should develop an "historic account" of past emissions. That account would be used to measure whether their current emissions fall above or below appropriate levels calculated from population, accumulated emissions and total global reduction objectives.

Each country would then hold a national account projecting future annual emissions entitlements up to a set date -- the authors offer 2050 as an example. How countries keep emissions within agreed levels would then mostly be left to their governments to decide.

Countries could then "engage in international trading in greenhouse gas emissions rights", with the condition that, by the set date, they have wiped out their "emissions rights deficit".

The trading scheme would aim to cover all countries, but could begin with only the main ones, the authors say.