Today, China’s first organization engaged in environmental exchange, China Beijing Environment Exchange, was established on the Financial Street.

With environmental problems increasingly threatening global development, China placed the environment at the top of its agenda alongside economic and social developments. As the world’s biggest developing county, China is committed to addressing these impending issues amid its efforts to develop a fast-growing economy and the construction of a harmonious society. China sees the environment as a critical factor to achieving sustainable development.

The General Work Plan for Energy Conservation and Pollutant Discharge Reduction, issued by the State Council, points out that, by 2010, China’s per ten-thousand GDP energy consumption should be reduced to less than 1 ton standard coal from 1.22 tons standard coal in 2005, which is a reduction of about 20%; water consumption per unit added value of industry should be reduced by 30%. By the end of the ”11th Five-Year Plan”, the total discharge of main pollutants should be reduced by 10%. To achieve these goals, both the government and market mechanisms should play an essential role.

Efforts to control the discharge of SO2 pollutants in the US began during the 1990s and the control of GreenHouse Gas discharge in Europe was launched at the beginning of the century. These efforts prove that, under the premise of ‘total discharge control,’ appropriate distribution, strict supervision, and unrestricted flow, the market mechanism is the most economical way to deal with environmental problems. The US and European actions were examples of resolving environmental problems using market-based methods.

There is a huge potential in the environment exchange market of China. However, the lack of information and expertise of Chinese enterprises results in a serious undervaluation of environmental exchange products. Therefore, an open platform for exchange is urgently needed. It should be used to explore the value of the environmental exchange projects and to encourage using the market to drive the Chinese environmental exchange which what the China Beijing Environment Exchange is to accomplish.

Xiong Yan, chairman of China Beijing Environment Exchange, explained that the exchange would work under the direction of the National Leading Group to Address Climate Change, Energy Conservation, and Pollutant Discharge Reduction under the direct leadership of the NDRC (National Development and Reform Commission), Ministry of Environmental Protection of the People’s Republic of China, and Beijing Municipal People’s Government. The exchange would be primarily focused on the exchange of technologies for environmental protection, energy conservation, pollution emission reduction, tracking the amount of energy savings, the trade of SO2 and COD discharge rights, and to be an information service for GreenHouse Gas emission reductions. It would integrate the efforts of national and international enterprises, intermediary agents, banks, and investment banks to improve the pricing power of Chinese enterprises in carbon trading. The exchange would lay a foundation for China to use market-based methods to solve the problems related to environmental protection, energy savings, and pollutant emission reduction.

Source: China Beijing Environment Exchange