China will launch a Clean Development Mechanism Fund (CDMF) in
March to help finance climate change projects, according to sources
with the Ministry of Finance.
Ju Kuilin, a senior official with the Ministry of Finance, said
the fund has been approved by the State Council, or China's
cabinet.
A group formed by seven authorities including the National
Development and Reform Commission and ministries of finance, and
science and technology will be responsible for managing the
fund.
The fund will collect some carbon credit transaction income,
donations from international financial organizations and
individuals as well as other sources approved by the State
Council.
According to Ju, the fund has got a US$6.4 million loan from the
World Bank, and Europe will pour in loans worth a further 500
million euros.
The Chinese government had approved nearly 300 CDM projects by
the end of January this year, including wind power, hydropower and
landfill gas power generation. With all these projects kicking off,
the fund will absorb around US$2 billion.
Under the Kyoto Protocol that came into effect in 2005, 38
industrialized countries must reduce their greenhouse gas emissions
by an average of 5.2 percent below the 1990 levels, during the
period of 2008 to 2012.
The CDM is a market-based mechanism that allows these countries
to fulfill their emission reduction obligations at much lower cost,
by investing in clean energy projects in developing countries such
as China.
China and the United Nations plan to set up a carbon trading
exchange in Beijing, making the city an important center for
multi-billion-dollar trade in global carbon credits.
China now accounts for one third of the global carbon credits
market, behind India. The UN predicts that China will become the
largest carbon credits provider by 2012, covering 41 percent of the
global market.
(Xinhua News Agency February 10, 2007)
