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Cleansing China’s environmental soul

The world’s biggest polluter seeks to cleanse their soul and win a brand new image as an environmental champ.

After the failure of the Copenhagen Summit – which ended in a sort of deal-no-deal agreement many blamed mainly on the Beijing government for its opposition not only to a legally binding agreement but to any agreement at all – China may start its first city-wide carbon cap-and-trade system by June in what may be seen as a trick to win global confidence back.

Site of the new diplomatic strategy is the northeast port city of Tianjin whose government is planning to impose a mandatory limit on energy used to heat buildings in the first half of this year. Property managers able to reduce energy use to below the limit will earn credits they can then sell.

China has pledged to reduce its carbon-dioxide output per unit of gross domestic product by 40 percent to 45 percent by 2020 compared with 2005 levels. Premier Wen Jiabao in January called pollution in the nation “grim” and said the government will strictly limit emissions from coal-powered generators, cement and steel producers.

The Chinese People’s Political Consultative Conference, the top advisory body to the nation’s parliament, this week proposed additional measures to cut carbon emissions. Premier Wen addressed the opening session today of the parliament’s annual meeting in Beijing and deliver what amounts to China’s State of the Union speech.

The Tianjin program, China’s first market-based carbon trading plan, was established by Arreon and the Tianjin Climate Exchange. The exchange is a venture between a unit of China National Petroleum Corp., the country’s largest oil and gas company, the Tianjin Property Rights Exchange and the Chicago Climate Exchange, according to its Web site.

“On the one hand, Tianjin needs to develop very quickly,” said Mu Lingling, deputy general manager of the Tianjin Climate Exchange. “On the other hand, it has to provide environmental protection.” The emissions trading program can help the nation achieve both targets, Mu said.

Beijing and Shanghai are also working on carbon trading programs and are in a “horse race” with Tianjin to develop emissions trading systems for the nation, Shi said.

Tianjin, about 120 kilometers (75 miles) southeast of the Chinese capital, recorded its pilot trades in carbon emissions allowances last month in a trial program covering heating suppliers serving more than 2 million square meters (21.5 million square feet) of residential buildings.

The Tianjin program was designed along the principles of cap and trade methodology, the government’s five-year economic plans and third-party auditing of emissions, said Dan Barry, deputy director of global carbon at Gazprom’s marketing and trading unit in London, which agreed to buy some allowances in the pilot phase.

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