The founder of a London-based metals brokerage joined a Chinese delegation traveling today to Cancun, Mexico, to discuss what the world’s biggest emitter can do to fight climate change.
“Major industrials in China sit up and listen,” Total Global Steel Chief Executive Officer Martin Lonergan said in an interview. “They’re very receptive when it comes to talking about cleaning their act up and offsetting emissions.”
Lonergan, who started Total Global Steel as a metals broker in 1999, was invited by the Beijing Stock Exchange to accompany Chinese officials attending the climate talks. Lonergan works with Chinese businesses to measure carbon-dioxide emissions and matches buyers and sellers of offset credits in China.
China is not bound by emissions regulation and has volunteered to reduce its impact on the climate, Lonergan said. The country’s government said it wants to cut carbon dioxide emissions per unit of gross domestic product by 45 percent from 2005 through 2020, and get 15 percent of its energy from renewable sources.
Total Global Steel was backed by U.K. trade and industry to join the Beijing exchange to offer carbon offsets. As part of the Chinese delegation, Lonergan will visit San Francisco, Chicago, New York and Washington, and attend the climate talks in Cancun, where nations will work on a treaty to extend or replace the 1997 climate protection Kyoto Protocol.
Total Global Steel was embroiled earlier this year in buying carbon credits that had already been used by factories and power stations in Hungary. Lonergan said he still holds recycled carbon credits; he declined to say how many.
Kyoto compliant
“We’ve got a stock of them,” he said. “They are Kyoto compliant. They came to us from a source in the Far East. We only lose money when we liquidate the position.”
Lonergan said China is taking lessons from the European Union’s emissions trading system, the world’s largest, to help develop its own carbon market to reduce emissions and spur investment in clean technologies. The market may be imposed in certain regions of China or for particular industries, said Huan Chen, deputy director general at China Clean Development Mechanism Fund.
The U.S. is losing out to China in developing clean technologies, said Erwin Jackson, deputy chief executive officer of Australia’s Climate Institute, in an interview.
The China Beijing Environment Exchange and NYSE Euronext and Caisse des Depots et Consignations’s Bluenext bourse founded the so-called Panda Standard, China’s own quality mark for emission reduction credits. These may come from projects such as restrictions on logging in the northern forests of China.
‘Fair argument’
Total Global Steel, with seven workers in Shanghai and plans to hire more, is working with China Everbright Ltd., a Hong Kong-based bank, to offset their emissions. Factories are likely to reduce and offset emissions to prevent a carbon tax being added to their imports into Europe, Lonergan said.
“It would be fair argument for the EU to place a carbon border tax on Chinese imports,” he said. China would rather produce steel under its own CO2-pricing system, he said.
