China launched its Clean Development Mechanism (CDM) fund, with
a potential funding of $3 billion, on Friday to finance the
country's efforts to tackle climate change.
The CDM fund, managed by the Ministry of Finance, will pool
money by taking part of the proceeds from the country's carbon
trade with developed countries, said Xie Zhenhua, vice-minister of
the National Development and Reform Commission (NDRC).
Established under the 1997 Kyoto Protocol, CDM allows developed
countries to fulfill their obligations in greenhouse gas emission
reduction by buying carbon credits from developing countries or
investing in their clean energy projects in a market-based
manner.
By the end of October, Xie said the NDRC had approved 885 CDM
projects. If those projects are implemented, it will trade a
greenhouse gas emission reduction of 1,500 million tons of carbon
dioxide, with a turnover of about $15 billion, more than $3 billion
of which will be injected into the new CDM fund, Xie said.
To ensure the sound operation of the new fund, China will first
focus on establishing good corporate governance and an effective
risk control system, Finance Minister Xie Xuren said at the
ceremony to launch the fund.
The Chinese government will implement a series of measures to
cut greenhouse gas emissions and help tackle global warming, Xie
said.
The country will promote technological upgrading to improve
energy efficiency and develop more low-carbon and renewable energy
products to balance its energy structure, he said.
China called on developed countries to make more efforts to
combat global warming.
Global warming, in essence, has mainly been caused by developed
countries as their industrialization has historically led to huge
emissions, said Zhang Yesui, vice-minister of foreign affairs.
Zhang said the CDM arrangement is a win-win move to cut
greenhouse gas emissions. "It can reduce developed countries' costs
in meeting their emission reduction requirements, while developing
countries can benefit from capital and technologies."
Zhang urged developed countries to take the lead to tackle
global warming.
"The solution is in our hands," said Asian Development Bank
President Haruhiko Kuroda.
The CDM fund is an innovative example of proceeds from carbon
trade being used to promote a low-carbon economy, he said.
(China Daily November 10, 2007)
