The CDM in China

Jiang, Xiaoyi

doi:10.1007/978-3-642-24737-8_3

Xiaoyi Jiang²

656 Accesses

Abstract

This chapter aims to explore the significance, current achievements of as well as barriers to implementing CDM projects in China. In order to achieve this objective, Sect. 2 investigates climate change issues in China through examining the impact of climate change on China, China’s capacities for addressing climate change in the domestic context and China’s position on climate change issues in the international regime. Based on the research findings of Sect. 2, Sect. 3 discusses the opportunities that the CDM would bring to China on economic, social, environmental and international status aspects respectively. Section 4 explores the current situation of CDM projects in China through examining the CDM practice and assessing its performance. Section 5 identifies various barriers to the implementation of CDM projects in China.

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Notes

1.
For details, see Chap. 2, pp. 13–16.
2.
National Development and Reform Commission, People’s Republic of China, China’s National Climate Change Programme (2007) 4 www.ccchina.gov.cn/WebSite/CCChina/UpFile/File188.pdf at 9 August 2011.
3.
Above n 2, 15.
4.
Ibid.
5.
Ibid.
6.
See The World Factbook (2008) Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html at 10 August 2011.
7.
Above n 2, 15.
8.
Ibid.
9.
Ibid.
10.
The data was issued in 2001. See Chinese Cities and Provinces Information and Links, A China Information Base http://www.chinatoday.com/city/a.htm at 10 August 2011.
11.
Above n 2, 15.
12.
The economy has changed from a centrally planned system that is under a rigid political control to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy.
13.
Above n 2, 16.
14.
This is according to the news conference held by the Information Office of Shanghai Municipal Government on February 7 2007.
15.
Above n 2, 16.
16.
Ibid.
17.
See General Information of the People’s Republic of China (PRC), A China Information Base
http://www.chinatoday.com/general/a.htm at 10 August 2011.
18.
Ibid.
19.
This is according to China Environmental Quality Communiques 1996–2008 released by Ministry of Environmental Protection of the People’s Republic of China http://jcs.mep.gov.cn/hjzl/zkgb/ at 8 August 2011.
20.
China Environmental Quality Communiques—Air Quality 2006 http://jcs.mep.gov.cn/hjzl/zkgb/06hjzkgb/200706/t20070619_105423.htm at 8 August 2011.
21.
Acid rain is caused mainly by SO₂ and NO_x from burning coal and oil.
22.
It refers to the program of economic reforms called ‘Socialism with Chinese characteristics’ in the People’s Republic of China (PRC) that were started in December 1978 by pragmatists within the Communist Party of China (CPC) led by Deng Xiaoping and are ongoing as of the early twenty-first century. The goal of Chinese economic reform was to generate sufficient surplus value to finance the modernization of the mainland Chinese economy. http://en.wikipedia.org/wiki/Economic_reform_in_the_People’s_Republic_of_China at 10 August 2011.
23.
See Chinabilty http://www.chinability.com/GDP.htm at 10 August 2011.
24.
See the primary accounting of China’s National Statistics Bureau http://www.stats.gov.cn/english/ at 10 August 2011.
25.
Ibid.
26.
Ibid.
27.
See China to Have 140 Million Cars by 2020 (2004).
28.
Above n 2, 9.
29.
Sinton et al. (2005).
30.
Chandler et al. (2002).
31.
Fu (2006).
32.
China Human Development Report (2002).
33.
Initial National Communication on Climate Change of the People’s Republic of China 2007 (the People’s Republic of China) www.ccchina.gov.cn/file/en_source/da/da2004110901.pdf at 10 August 2011.
34.
Above n 2, 6.
35.
Fu, above n 31, 6.
36.
See, e.g., ‘Chinese CO₂ Emissions in Perspective’ (Netherlands Environmental Assessment 2007), ‘the surging power demand from China’s rapidly expanding economy caused CO₂ emissions to rise by 9% in 2006…that increase, coupled with a slight United States decline meant that China’s emissions for the year surpassed those of the US by 8%.’
37.
Herzog and Pershing (2005).
38.
Ibid 14.
39.
See Statistics and Balance, International Energy Agency http://www.iea.org/stats/index.asp
Organization for Economic and Cooperation Development (OECD) countries consists of most of the developing countries.
40.
China’s Agenda 21 1994 (the People’s Republic of China) http://www.acca21.org.cn/english/index.html at 3 March 2011.
41.
China’s Eleventh-5 Year Plan (2006–2010) http://en.ndrc.gov.cn/hot/t20060529_71334.htm 3 March 2010.
42.
See China’s Eleventh 5-Year Plan (2006–2010), Ch 6 http://en.ndrc.gov.cn/hot/t20060529_71334.htm at 3 August 2011.
43.
China’s National Assessment Report on Climate Change (I) & (II) (2007).
44.
For details, see Chap. 2, p. 17.
45.
National Development and Reform Commission, People’s Republic of China, China’s National Climate Change Programme (2007) http://en.ndrc.gov.cn/newsrelease/P020070604561191006823.pdf at 3 August 2011.
46.
See Kim and Jones (2008).
47.
Ibid.
48.
See Olive et al. (2009).
49.
The State Council is the top administrative organization in China.
50.
Kim and Jones, above n 46. In fact, this regulation has been put into the Energy Conservation Law 2007.
51.
Emission Standard of Coalbed Methane/Coal Mine Gas(on trial)2008 (the People’s Republic of China) www.ep.net.cn/cgi-bin/dbbz/doc.cgi?id=1067 at 11 August 2011.
52.
Corporate Income Tax Law 2008 (the People’s Republic of China) www.investteda.org/downloads/Tax.doc at at 11 August 2011.
53.
Agencies (2008).
54.
Ibid.
55.
The research was conducted by the Chinese Ecological Education Promotion Association and the Ecological Culture Research Center under the Peking University. It was carried out in the five cities in different regions of China and lasted more than 3 month. Accordingly, this survey could be considered to authentically reflect the public environmental awareness in urban areas.
56.
Ibid.
57.
Li (2007).
58.
Ibid.
59.
Above n 2, 58–60.
60.
For details about the Bali Conference, see Chap. 5, pp. 168–170.
61.
For more details, see Chap. 2, p. 22–23.
62.
The Chinese government issued Measures for the Operation and Management of CDM projects in China in 2005. Article 4 of the Measures stipulates that ‘The priority areas for CDM projects in China are energy efficiency improvement, development and utilization of new and renewable energy, and methane recovery and utilization.’ In addition, the Chinese government imposes different ratios of tax to encourage the energy sectors. Article 24 of the Measures stipulates that ‘(1) the Government of China takes 65% CER transfer benefit from HFC and PFC projects; (2) the Government of China takes 30% CER transfer benefit from N₂O project; (3) the Government of China takes 2% CER transfer benefit from CDM projects in priority areas and forestation projects.’
63.
Vennemo et al. (2006).
64.
See above n 62.
65.
See Clean Energy Changes Life of People in Remote Regions (2005).
66.
Due to the remarkable disparity in economic development in different regions of China, the Chinese government introduced the strategy of large-scale development of its western regions in 2000 with a view to promoting the development in western regions.
67.
Vennemo, above n 63, 220.
68.
Project developers also needs to provide an analysis of environmental impacts.
69.
Cited in The Report of the Asia Meeting on Efficient Clean Development Mechanism Operations (2003). See Zhang (2004).
70.
ZhongXiang Zhang, ‘Towards an Effective Implementation of Clean Development Mechanism Projects in China’ (Working Paper 61, East-West Center, 2004) 5 www.eastwestcenter.org/fileadmin/stored/pdfs/ENVwp061.pdf at 11 August 2011.
71.
Ibid 7.
72.
CERUPT is short for ‘Certified Emission Reduction Unit Procurement Tender’.
73.
Clean Development Mechanism in China, is available on the Internet at http://cdm.ccchina.gov.cn/english/ItemList.asp at 12 August 2010.
74.
For more details, see Chap. 5, n 34 ‘An Increase of the Rejection and Withdrawal Rate of CDM Projects in China’.
75.
HFC-23 (trifluoromethane) is generated as a waste gas in the manufacturing process of HCFC-22 which is a gas used as refrigerant and as feedstock, a raw material for other products. It has a global warming potential 11700 times greater than CO₂. The UNFCCC and the Kyoto Protocol list the HFC-23 as a major potential GHG and one of the first types of projects established under CDM was the investment in the destruction of the compound HFC-23.
76.
This is calculated according to the information on registered CDM projects disclosed by UNFCCC website. The Chinese HFC-23 projects are expected to generated 57,785,472 tons of CERs.
77.
Ellis and Kamel (2007).
78.
Above n 62.
79.
Huang (2007). See also UNEP (2007).
80.
Ibid 4.
81.
Clean Development Mechanism in China, is available on the Internet at http://cdm.ccchina.gov.cn/english/ItemList.asp (last accessed on 30 December 2010).
82.
As mentioned earlier, more CERs are due in part to HFC-23 projects.
83.
See, Oster (2008).
84.
Tianjin Climate Exchange Launch Carbon Contract (2009).
85.
Capoor and Ambrosi (2007).
86.
There are no unilaternal CDM projects in China.
87.
See Barreca (2010).
88.
Zhang, above n 70, 11.
89.
Capoor and Ambrosi, above n 85, 4.
90.
Ibid, 32.
91.
World Bank Team, ‘State and Trends of the Carbon Market 2011’ (The World Bank 2011) 39 http://siteresources.worldbank.org/INTCARBONFINANCE/Resources/StateAndTrend_LowRes.pdf at 10 August 2011.
92.
For more details, see Chap. 2 pp. 41.
93.
Capoor and Ambrosi (2009).
94.
Clean Development in China http://cdm.ccchina.gov.cn/web/item_new.asp?ColumnId=62 at 10 August 2011.
95.
Liu (2006).
96.
‘China Launches CDM Fund to Address Climate Change’, Beijing, 9 November 2007, Xinhua Net http://news.xinhuanet.com/english/2007-11/09/content_7039202.htm at 20 August 2011.
97.
Measures for the Operation and Management of CDM projects in China 2005 (the People’s Republic of China)
http://cdm.ccchina.gov.cn/english/NewsInfo.asp?NewsId=905 at 20 August 2011.
98.
China has Established 27 Provincial CDM Technical Service Center, China Sustainable Industrial Development Network, available at http://www.csid.com.cn/NewsInfo.asp?NewsId=68893 at 30 August 2011.
99.
The website address is http://cdm.ccchina.gov.cn/english/index.asp at 30 August 2011.
100.
China Clean Development Mechanism Fund website, http://www.cdm-fund.org at 30 August 2011.
101.
Beck (2007).
102.
Chinese Enterprisers’ Understanding about the CDM. (Trans of [中国企业对CDM的理解]) (2004).
103.
For example, Point Carbon, a world-leading Oslo-based carbon market adviser, continuously evaluate all important CDM host countries to what extent they are attractive for CDM-related investment based on a detailed assessment of factors related to climate institutions, project status and potential, and investment climate. According to its rating reports, China successively gets the highest grade, ranking the first place.
The rating are based on qualitative and quantitative analyses of three following faces of the CDM host countries’ attractiveness :
Institutional conditions: Status of framework for approving CDM projects and government attitude to the CDM;
Investment climate: Degree of stability and investor-friendliness, capital and service markets, amount of Foreign Direct Investment;
Project status and potential: the CDM potential and number of projects approved by host country, signed and registered by the CDM executive board.
104.
For more details, see Chap. 2, p. 27.
105.
For details, see Chap. 2 Part 2.4.2 Pitfalls of the CDM pp. 43–46.
106.
For details, see Chap. 2, pp. 35–38.
107.
Policy Research Center for Environmental and Economy of the Ministry of Environmental Protection, Research Center for Urban Development and Environment of the Chinese Academy of Social Science and Energy Research Institute of National Development and Reform Commission (2009).
108.
Ibid.
109.
For details, see Chap. 2, 2.4.2.2 Shortcoming of CDM Complex Procedure pp. 44–46.
110.
Ellis and Kamel, above n 77, 10.
111.
Ibid 37.
112.
For details, see Chap. 5.
113.
Ellis and Kamel, above n 77, 22.
114.
It will be further discussed in Chap. 4.
115.
Ellis and Kamel, above n 77, 28.
116.
For details, see Chap. 2 Transaction Costs and Potential Risks p. 48.

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China Institute of Boundary and Ocean Studies, Wuhan University, Wuhan, Hubei, People’s Republic of China
Xiaoyi Jiang

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Jiang, X. (2013). The CDM in China. In: Legal Issues for Implementing the Clean Development Mechanism in China. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24737-8_3

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