China Pushes for Own National Legislation on Climate Change

With Shenzhen and Shanghai already slated to commence their respective carbon emissions trading on June, China is now mulling to draft its own national legislation on climate change.

Xie Zhenhua, vice chairman of China's National Development and Reform Commission, said in Beijing the federal government will actively push for the initiative to be completed within two years the latest.

China, the world's biggest emitter of greenhouse gases linked to global warming, targets to reduce by 40 per cent to 45 per cent before 2020 its carbon emissions per unit of economic output. The state governments of Shenzhen and Shanghai have started to collectively work on this, beginning with their June carbon emissions trading launches.

Aside from the legislation, China will likewise study the carbon-pricing efforts being implemented in South Korea, Australia and the European Union, Mr Xie said.

Although the EU carbon market is now facing crisis, Mr Xie said China will rally on to pursue developing its own carbon emissions trading platform.

"China has pledged these targets to the international community to deal with climate change and they will not change," he said at an event in Beijing. "Even if other countries say they will do nothing, we will keep to our strategy. No matter what happens to our economy, we cannot make any change."

But China will first focus on its internal strategy before linking up with the global arena.

"We first need to establish a carbon market, in the next few years, according to Chinese conditions and the conditions of developing countries," he said.

It will then eventually link its carbon trading platforms with those elsewhere in the future.

Admittedly, the EU carbon market is China's guinea pig.

"Why have the prices gone from such a high to such a low? Because of the rate of emissions cuts," he said. "If it was higher, and if there were more pressures, the market would be much more active. It is probably related to the initial design of the exchange and the way emissions targets were allocated."

Carbon prices on Europe's Emissions Trading Scheme (ETS) were trading at €2.46 ($A3.11) per tonne on Tuesday, way down low compared from the €18 just two years ago.