Two environment and energy exchanges were launched yesterday in Shanghai and Beijing, as the country increases efforts in emission cutting and energy conservation.

The Shanghai Environment and Energy Exchange will collect, filter and publicize information for the environment and energy-related equity and emission credit trading, and provide a platform for such deals between companies or institutions, according to a statement from Shanghai United Assets and Equity Exchange (SUAEE), the sole owner of the environment and energy exchange.

"The establishment of the environment and energy exchange can help transfer the past government-administrated energy allocation into the market," said Luo Xinyu, general manager of SUAEE.

The exchange will also provide consultancy, project design and evaluation, fund operation and technical support to equity owners, energy reservation integrators, research companies and investment institutions.

Luo said the public trading of carbon emission credit on the exchange will change the current situation. The sales price of domestic carbon emission credit is lower than international prices.

"Overseas companies now can come to China and buy the carbon credit on the exchange," said Luo. The Kyoto Protocol, effective from 2005, set strict restrictions on carbon emission of developed countries. Many developed economies began to buy carbon credits from developing countries.

Statistics from the United Nations showed that China provided one-third of the world's carbon emission reduction volume, second only to India.

But Wu Jun, deputy director of the Environmental Protection Science and Technology R&D Center in Yixing, said the local government still needs to stipulate specific related rules on company's energy emission credit and enhance its role in monitoring and enforcement.

Ai Baojun, vice-mayor of Shanghai, said in June that the government will step up efforts to raise the energy utility efficiency and reduce emission through industry restructuring and by updating techniques.

Meanwhile, Beijing also set up its environment exchange yesterday. Xiong Yan, president of Beijing Environment Exchange, said that it will mainly provide information on energy reservation related to technical deals, sulfur dioxide and COD (chemical oxygen demand) credit trading and emission reduction of greenhouse gases.

Luo told China Daily that besides Shanghai and Beijing, Tianjin was also planning to set up an environment and energy exchange.

(China Daily August 6, 2008)