Beijing - China on Friday launched a state-run fund to support trading of carbon emissions under the Kyoto Protocol on climate change. China's clean development mechanism (CDM) fund aims to raise money for new projects and generate revenue from existing projects to support energy efficiency and clean power initiatives, officials said.
CDM funds offer "immense opportunities" and emissions trading is an "important first step" in the fight to reduce global warming, Haruhiko Kuroda, president of the Asian Development Bank, said at the launch of the Chinese fund.
"The CDM fund has enormous potential to strengthen the PRC's [People's Republic of China's] response to climate change," Kuroda said.
China is the world's biggest beneficiary of emissions trading, in which companies that overstrip their caps on greenhouse gas emissions may buy credits from less polluting businesses. China had 885 CDM projects approved as of the end of October.
The projects have the potential to generate about 15 billion dollars for Chinese firms and 3 billion dollars for the CDM fund, said Xie Zhenhua, a vice minister of the National Development and Reform Commission.
Vice Finance Minister Xie Xuren said the new fund would "support China's efforts to promote energy saving and protect the environment."
The UN-backed clean development mechanism is designed to promote sustainable development via environmentally friendly investment by governments and businesses in industrialized nations.
In one of the latest CDM projects to begin operation in China, the north-eastern province of Heilongjiang this week started burning plant and vegetable stalks to generate electricity.
The 30,000-kilowatt plant with a budget of 553 million yuan (74.17 million dollars) is run by a subsidiary of China's national grid and will sell emissions credits to Electricite de France, state media said
China released an action plan in June that reaffirmed its commitment to reduce energy consumption per unit of GDP by about 4 per cent annually and emissions of major pollutants by 2 per cent annually by 2010.
But it urged developed nations to take the lead and allow poorer nations to focus on economic development.
"The environmental protection issue is a development issue," Vice Foreign Affairs Minister Zhang Yesui said Friday.
"Developed countries are mainly responsible for climate change," Zhang said.
Rapidly developing China was expected to surpass the United States as the world's largest producer of greenhouse gases soon and might have already reached that level according to some estimates, raising its per-capita emissions to about 25 per cent of US emissions.
Negotiations on an agreement to replace the Kyoto Protocol, which expires in 2012, are to begin formally at next month's UN-sponsored climate change conference on the Indonesian island of Bali.
