Citigroup Inc. will trade carbon emission allowances in China’s first market-based program to reduce energy consumption, the United States bank said today.
Citigroup’s Global Markets Ltd. unit will be the first financial institution to participate in the pilot project in Tianjin, China, according to an e-mailed statement. It will buy allowances from Tianjin Jinqiang Building Energy Saving Industry Development Co. for an undisclosed price.
Stephen Thomas, a Citigroup spokesman based in Shanghai, couldn’t immediately provide any comments.
China, the world’s biggest emitter, is a participant in last year’s Copenhagen Accord and pledged to cut its CO2 output per unit of gross domestic product by as much as 45 percent through 2020. The new program established by the Tianjin Climate Exchange and Arreon New Energy Co. initially covers heating suppliers serving more than 2 million square meters of residential buildings.
Tianjin’s municipal government will set an emissions- intensity cap, the statement said. Heating suppliers with emissions intensities below the cap will be allocated carbon allowances, which they can sell to participants that exceed the cap, or to third-party traders, it said.
After the pilot phase, the Tianjin plan may be extended to cover all public, commercial and residential buildings and their heat suppliers.
The Tianjin Climate Exchange is a venture of a unit of China National Petroleum Corp., the Tianjin Property Rights Exchange and the Chicago Climate Exchange, according to its Web site.
The Copenhagen Accord is the first climate-protection agreement that contains numerical goals for the world’s biggest greenhouse-gas emitters. Still, China, India, South Africa and Brazil seek to “limit the impact” of the U.S.-led Copenhagen Accord by emphasizing that the climate change deal isn’t legally binding, U.S. negotiator Todd Stern said yesterday.
