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Trading Carbon : November 2011
09 NEWS November 2011 China's Guangdong province has selected the Southern United Asset & Equity Exchange to operate as its carbon bourse when it launches its pilot emissions trading scheme in 2013, the company confirmed on October 10. The exchange plans to launch carbon credit contracts by the end of this year, but will initially offer voluntary credits as the Guangdong government draws up plans for the scheme, said Chen Jing, head of the company's development research department. "We'd like to see regular deal making from next year. And we are also interested in forming a united trading framework by cooperating with other exchanges," she told Point Carbon News. Guangdong, China's most populous province with more than 100 million people, has launched a study to establish an ETS for the power and building materials sectors, although it remains unclear who would be included in the scheme. Of six regions and cities selected by the government as potential candidates to pilot carbon markets ahead of a national trading scheme, Guangdong appears to have made the most progress in developing a trading s ystem. Chen said the exchange would be keen to make sure it could cooperate with exchanges chosen to host markets in other provinces as China gradually moves towards a federal system. The bourse is now drawing up its own regulations to host the region's carbon market. "We're engaged in registry building and inventory compiling. The exchange will function in CO2 assets trading, financing, clearing and risk management," said Chen. Initially only spot trading will be available on the platform, as the China Sec urities Regulatory Commission has yet to outline a legal framework for trading carbon credit futures. A UN-appointed panel has recommended allowing high-speed rail networks in developing countries to earn offsets by displacing more carbon-intensive journeys by air and road, UN documents showed on October 14. The blueprint, considered by the methodology panel of the UN's Clean Development Mechanism (CDM) at its latest meeting, was put forward using a project proposed for a rail line in South Korea, one of the richest and most technologically advanced countries eligible to earn carbon credits through the CDM. The methodology needs to be formally approved by the CDM Executive Board, which would mean it could also be applied to other CDM host countries that upgrade rail networks to fuel economic growth and ease congestion. The South Korean high speed rail scheme is designed to earn 250,000 credits annually from 2016, when the project is due to start. Transport projects -- such as metro rail systems and bus corridors -- have been slow to evolve through the CDM, partly because of the complexity of establishing an emissions baseline and sampling techniques to measure c uts in CO2, according to specialists. In September, an extension to Delhi's metro became the first mass rail transit system to be registered as a CDM project, although revenues from the carbon market are only a small fraction of the scheme's high overall cost. Japan has also embarked upon plans to generate non-UN offset credits from high speed rail through a separate bilateral market mechanism it plans to launch -- involving supplying clean technology for carbon credits it can use to meet its pledge to cut emissions 25 percent below 1990 levels by 2020. In addition, the meth panel recommended two other blueprints for approval. They included one for cogeneration in power plants, that if approved would bring the total number of CDM methodologies to 151. It rejected a methodology for an efficient electric arc furnace to be used in steel production. More information was requested by the panel on a proposal to cut the carbon footprint of information technology data centres through the use of more energy- efficient servers. UN panel recommends fast trains for CDM Guangdong picks exchange for carbon trading REUTERS/STRINGER TAIWAN BOBBY YIP/REUTERS
December - January 2011