Mumbai: Arcelor Mittal, the world's largest steelmaker, which is eying major inroads into China, along with the United Nations will help the country make a head start in the multi-billion-dollar global carbon market with Asia's first carbon-credit exchange in Beijing.
The setting up of carbon credit brokerages in western China, which is being co-ordinated, by the UN is expected to spur investments in technology that reduce emissions, UN officials said in Beijing.
Arcelor Mittal is providing financial support, the UN said, without specifying the amount. The project is estimated to cost $1.7 million over three years.
China, which is set to overtake the United States as the world's largest carbon dioxide emitter, will have an exchange and 12 brokerages in the western province.
The project proposes establishment of clean development mechanism (CDM) technical service centres in 12 provinces, including Xinjiang, Qinghai, and Inner Mongolia. These centres will act as brokers between international investors and local partners to kick-start "green" investment in China's less developed regions.
The initiative will help China build capacity and provide policy input for the expansion of carbon market and reduction of greenhouse gas (GHG), reports quoting the UN resident co-ordinator and UNDP resident representative in China Khalid Malik said.
"Assisting China in its efforts to cope with the impact of global climate change and to create more sustainable, less GHG intensive development paths is an important focus for UNDP. A range of market-based instruments has now emerged to support this effort, with carbon trading emerging as a major opportunity," he said.
Carbon dioxide emission is contributing to global warming that could raise average world temperature by up to 6.4 degrees Celsius (11.5 degrees Fahrenheit) by the end of this century, a UN panel of scientists said.
China, the world's fastest-growing major economy and supplier of a third of global carbon credits, is unlikely to meet a government target of reducing its energy use 20 per cent before the end of 2010, the International Energy Agency said.
To cut pollution and raise efficiency, China will shut 60,000 MW of electricity-generating capacity at smaller power plants by 2010, Zhao Xiaoping, director of the energy bureau at the Chinese National Development and Reform Commission, said
China, the world's fourth-largest economy, is classified as a developing country under the Kyoto Protocol, enabling it to voluntarily sell the credits to cut its output of pollutants.