A new survey has found that carbon emission permits in China’s fledgling carbon markets will trade below $5 a tonne in initial years, lower than the crisis-hit European market.
Australian-based consultancy Climate Bridge’s survey found companies expected trade to be hampered by a lack of regulation.
Reuters Newsagency reports the world’s biggest-emitting nation, China is launching pilot markets in its regions as a first step to building a national Emissions Trading Scheme (ETS).
That ETS is aimed at to reining in China’s output of heat-trapping gases blamed for causing climate change.
However many of the rules and regulations of the markets have yet to be announced, and participants have little experience in monitoring, reporting and verifying emissions, the respondents said.
Climate Bridge surveyed 83 representatives from big-emitting companies, consultancies and academics on the development of carbon trading.
“The main barriers to building a mature market come from the disorder of the policy, rather than from the operation of the market,” the report said.
The Australian consultancy said carbon markets in China could develop quicker if regional governments announced clear rules for trading.
Eighty per cent of respondents said trading of permits would be limited until 2015, while 75 per cent said the price of Chinese emission permits would be US$4.92 or lower in early trades.
Of China’s seven planned regional pilot schemes, only Shenzhen has its market up and running, with Beijing, Guangdong and Shanghai scheduled to launch before the end of the year.
The survey respondents were optimistic about the longer-term development, with two-thirds saying they believed a national ETS would be launched between 2015 and 2020.
The majority said creating an all-China emissions market would give the government more clout in international climate change negotiations.
