Beijing: Arcelor Mittal, the world’s biggest steelmaker, will set up carbon credit brokerages in western China with the United Nations (UN) to spur investments in technology that reduce emissions.
The three-year, $1.7 million (Rs7.48 crore) project will place brokerages in 12 regions in western China including Xinjiang, Qinghai and Inner Mongolia to broker international investments in local businesses to reduce emissions and help halt climate change, the UN said on Tuesday in Beijing.
The UN is trying to help China, which may overtake the US as the world’s largest emitter of carbon dioxide by the end of 2009, to invest in cleaner industrial technology. Global warming, caused by greenhouse gases, may raise average world temperature by up to 6.4 degrees Celsius by the end of this century.
“Assisting China in its efforts to cope with the impact of global climate change and to create more sustainable, less greenhouse-gas intensive development paths is an important focus,” said the UN’s resident coordinator in China Khalid Malik.
China, the world’s fastest-growing major economy and supplier of a third of global carbon credits, is unlikely to meet the government’s target of cutting the energy used to produce each unit of gross domestic product by 20% before the end of 2010, the International Energy Agency had said on 4 December 2006.
To cut pollution and boost efficiency, China will shut 60,000 MW of electricity-generating capacity at smaller power plants by 2010, the National Development and Reform Commission’s energy bureau director Zhao Xiaoping has said.
The 1997 Kyoto Protocol lets companies in developed nations buy credits from projects that reduce emissions in developing economies, where cleaning up production processes is cheaper.
Those credits can be sold in carbon-trading systems like that of the European Union, helping rich nations meet Kyoto targets.
China is classified as a developing country under the Kyoto Protocol, enabling it to voluntarily sell the credits to cut its output of pollutants.
China’s ministry of science and technology, which coordinates the nation’s participation in global carbon trade, is working with the UN and the ministry of commerce on the project.
Arcelor Mittal is providing financial support, the UN said, without specifying the amount.
The global trade in emissions credits grew to $22 billion (Rs96,800 crore) in the first nine months of 2006, double the $11 billion in the full year of 2005, the World Bank had said on 26 October.