In an effort to grow the world's largest clean development market, the Chinese government issued yesterday a regulation on new projects using advanced technology and capital from developed countries to reduce greenhouse gas emissions. The regulation goes into effect on June 30.

Approved by the National Development and Reform Commission and the Ministry of Foreign Affairs, the clean development mechanism regulation creates a legal foundation for the expansion of clean development practices in China. It clearly spells out requirements and conditions for new projects.

“It constitutes the game rules for enterprises and developed countries getting involved in clean development mechanism projects,” said Gao Guangsheng, director general of the National Coordination Committee for Climate Change.

Only Chinese enterprises and companies held by Chinese partners will be eligible to apply for clean development projects, according to the regulation.

Priority will be given to projects aimed at improving energy efficiency and exploring new and renewable energy sources, said Gao.

The regulation was proposed as part of the Kyoto Protocol adopted on December 11, 1997.

Clean development projects as described in the regulation assist developed countries to fulfill their commitments on emission reduction. They also provide an opportunity for China, a developing country not bound to reduce emissions under the protocol, to participate in the process of global greenhouse gas mitigation and to promote sustainable development.

Industrialized countries can earn emissions credits by investing in emission-reducing projects in developing countries.

China is the largest potential clean development market in the world, accounting for about half the world’s total, in part because of its heavy reliance on coal and its lack of up-to-date energy-efficient and renewable energy technologies.

The country is seeking clean development initiatives and assistance from foreign contributors to address climate change through technological transfers, capacity building and public education.

The steps taken so far include technology upgrades to raise energy efficiency and the promotion of renewable energy to replace conventional fuels, as well as planting trees and working to control the impact of the human population on the environment.

China is working in this area with international agencies such as the World Bank and the Asian Development Bank, as well as with a number of countries including Canada, the UK, Denmark and the Netherlands.

Currently China has about 20 small projects covering hydropower, wind farm, energy-free refrigeration, municipal waste incineration for power generation and sugarhouse, waste-based organic fertilizer production to avoid methane emission.

(China Daily June 25, 2004)