British carbon exchange specialist Climate Exchange has confirmed that it has signed an agreement with the Chinese authorities to start an emissions trading scheme in the country.
Announced today, the deal will see the organisation's US subsidiary the Chicago Climate Exchange (CCX) work with the Chinese National Petroleum Corporation Assets Management Co (CNPCAM) and the City of Tianjin to develop what could be the country's first carbon trading scheme.
The news follows the announcement of a memorandum of understanding between the parties in December last year.
Executives at CCX were approached for comment, but refused to reveal any more details on the deal with CNPCAM at this stage. However, CCX claims that its business is continuing to expand rapidly, with 50 million tonnes of CO2 trade already this year compared to 20 million throughout the whole of last year.
The political climate in the US, with both presidential candidates backing a national emissions trading system, had also helped to build long term confidence in the market a spokesman for the company said.
If the CCX and CNPCAM deal proves substantial it could go some way to encourage other countries to adopt similar schemes.
Critics of the proposed carbon trading mechanism in Australia, for example, have argued the country should not adopt an emissions trading scheme until large developing nations such as China and India have made the first move. As such, signs that China is considering experimenting with the idea of carbon trading should help strengthen the Australian government's case for a cap-and-trade scheme to be introduced from 2010.
Similarly, the emergence of a Chinese carbon exchange could also help strengthen the rationale for the trial cap-and-trade scheme announced by by the Japanese government earlier this week.
Despite criticism from all corners on its environmental record, China has made some efforts to improve its green reputation in recent years, including the news earlier this month that the China Energy Conservation Investment Corporation (CECIC) has signed an agreement with the Carbon Trust that will see the two organisations begin work on introducing carbon footprint labels to products manufactured in China.
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