Carbon trdi

1. Carbon trading
Why trade with carbon?
Role of developing countries?

2. Outline
• Background of carbon trading /Clean
Development Mechanism (CDM)
• CDM in Malaysia
• CDM in China
• Conclusion

3. Climate Change
• Predicted temperature rise by 2100: 1.1-
6.4 °C (IPCC report 2007)
• Very likely that emitted GHG are
responsible
• Substantial effects:
– rising sea levels
– submerging land
– reduced food security
– Homelessness
– Large and unpredictable economic impacts

4. Carbon trading under Kyoto
• International Emission Trading
• Joint Implementation
• The Clean Development
Mechanism (CDM)

5. The CDM – how it works
Source:http://cdm.greentechmalaysia.my/what-is-
cdm/intro.aspx

6. The CDM - objectives
Threefold
Contribute to the overall goal of Support for Annex I countries to
stabilizing world GHG achieve their emission reduction
concentrations targets
Assist non Annex I countries in achieving
sustainable development
(technology transfer, finanze)

7. Source: Danish Management Group

8. Malaysia and the CDM
• Fast growing nation/ high
energy demand
• 2nd largest Palm oil
producer
– Many CDM projects:
Conversion of Palm oil
waste (biomass and biogas)
into energy, composting
– But also: EE and RE
projects
• Malaysian PM in Cop 2009:
Number of CDM projects in Asia by country, Dec 2012
reduction of GHG emissions
by UNEP, http://www.cdmpipeline.org/cdm-projects-region.htm by 40% by 2020 with the
help of developed countries

9. Malaysia – legal CDM criteria
• Support and direct benefits for sustainable
development (economic, environmental & social)
• CER-buyer: party from Annex I country
• Technology transfer or improvement of existing
technology
• Fulfilment of CDM EB criteria at international
level
• Applicant must show ability to implement the
project

10. CDM in China
In 1th Janunary, 2009, 579 CDM projects were registered
project type % of total project Anuual emission % of total
reduction reduction
hydroelectric 69.4% 63 154 453 35.0%
power
wind 21.9% 56 195 023 31.1%
Waste gas/heat
utilization 11.1% 20 938 625 11.6%
Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment

11. Actors involved in China's CDM project
participant numbers of % of total
countries projects projects
Developers:
the domestic companies that
initiate and implement
projects UK 191 33%
The
Netherland 112 19.3%
Participants: s
the foreign firms involved in the
projects.
Japan 86 14.9%

12. Policy regulation of CDM in China

13. CDM Measures in China
One notable aspect of CDM projects in China is that, under Art.24 of
the CDM Measures:
• resource of emission reductions are owned by the Chinese
Government:
• CERs produced from a particular CDM project are owned by the
Chinese project owner;
• proceeds from sale of CERs are owned jointly by the Chinese
Government and the Chinese project owner.
It should also be noted that under the CDM Measures, the Chinese
Government is entitled to:
• 65 per cent of the sale price of CERs from hydrofluorocarbon and
perfluorocarbon projects;
• 30 per cent of the sale price of CERs from nitrous oxide projects;
• 2 per cent of the sale price of CERs from new and renewable energy
projects, or to recover and utilise coal bed methane (all of which are
considered priority projects).

14. Benefits of CDM implemention for China
Reduce carbon emission-environmental benefit
2012
1997

15. Economic benefits
1. Reduce government expenditure
● Less finance for technology and science
● Less finance to increase job opportunities
China had created 28million jobs
as a result and that would
rise to 40million.

16. 2. Enhance revenue
●Enhance tax revenue for government
17% VAT for power sale
5% business tax for project implementation
25% income tax for employees
●Many revenues from CERs

17. Unit: t
China :
CERS issued ≈0.67 billion
The lowest price per CERs= €3.28 (lowest price in China
in 2012)
The revenue≈0.6 7× 3.28≈ €2.20 billion

18. Problems of CDM implemention for China
Focus on agricultural biogas projects
►Long CDM registration time
1. For 2 registered AWMS biogas CDM projects need to
1year.
2. Shangdong Minhe biogas project is waiting for over 2
years since it started validation and it is still under
correction right now.
►Technical failure
Mengniu Aoya biogas project stopped CDM procedure

19. Conlusion
• Malaysia: high growth potential for CDM;
government focuses on supporting RE and EE
projects
• China:
Althought there are some problems with CDM in
China, In terms of the measures, the income
from CERs and tax, the government also can get
lots of profit,
CDM projects can bring a large amount
of revenue to developing countries

20. References
● “Global Warming & Climate Change (Doha Talks, 2012)
http://topics.nytimes.com/top/news/science/topics/globalwarming
/index.html#
● Anon, 2008. Carbon Trading, Climate Change, and the Kyoto
Protocol: New Report Discovers Carbon Trading to Be Win-Win
Proposition for Poor Villagers, Big Business, and for Slowing
Climate Change.
● Wei, C., J. Ni, and L. Du. 2011. “Regional Allocation of Carbon
Dioxide Abatement in China.” China Economic Review.
● Wu, Q. 2011. “Policy and Politics of a Carbon Market in China.” In
J. Peetermans, ed. Greenhouse Gas Market Report 2011: Asia and
Beyond: the Roadmap to Global Carbon & Energy Markets. Yi,
W.J., L.L. Zou, J. Guo, K. Wang, and Y.M. Wei. 2011. “How Can
● China Reach Its CO2 Intensity Reduction Targets by 2020? A
Regional Allocation Based on Equity and Development.” Energy
Policy.

21. ● Chang, Y.C., and N. Wang. 2010. “Environmental Regulations and
Emissions Trading in China.” Energy Policy 38 (7): 3356–3364.
● Olivier, JGJ, G. Janssens-Maenhout, J. Peters, and J. Wilson. 2011.
Long-term Trend in Global CO2 Emissions: 2011 Report.
● State Council. 2011. Outline of the 12th Five Year Plan for National
Economic and Social Development.
● Zhu, C., F. Huang, and A. Jiang. 2010. “Study on Construction of
Chinese Carbon Trading System in Post-CDM Era.” In Industrial
Engineering and Engineering Management (IE&EM), 2010 IEEE 17Th
International Conference On, 1851–1855.
● "CDM Benefits " http://cdm.unfccc.int/about/dev_ben/index.html

22. Group members:
Stefanie Hake
Lixian Fu
Jing Guan
Haiyan Liu