Changsha City Plans Local Emissions Trading

The city of Changsha, the capital of Hunan province in south-central China, is preparing to launch an emissions trading scheme, its mayor said on Tuesday.

Changsha's plan is a local version of a tentative outline drawn up by the central bank, for a domestic emissions trading scheme that could cover everything from greenhouse gases to water pollutants, and speed China's push for greener growth.

Changsha would assign its local districts quotas for dust, carbon dioxide and chemical oxygen demand (COD), a measure of water pollution, Zhang Jianfei told a news conference.

"We are considering innovations like an emissions trading market," Zhang said, as he listed other pollution-reducing measures like taxation and pricing schemes.

Changsha will assign levels to each district and then fine them if they exceed the level or give incentives if they are under. They could then trade those quotas, Zhang said, estimating the system could be in place as early as next year.

Districts would have to allocate pollution targets to local enterprises.

Changsha, which relies on the polluted Xiang River for its drinking water, has invested to monitor pollution levels and lobbied to reduce emissions in upstream industrial cities.

Hunan province is spending 17 billion yuan ($2.48 billion) to make the Xiang River the "Rhine of China," governor Zhou Qiang told reporters.

But efforts to close indium and zinc plants in Zhuzhou in the last few years resulted in those companies moving upstream to other, less regulated towns.

The Zhuzhou Smelter Group, China's largest zinc producer, is nearing the end of a 4.7 billion yuan investment to upgrade technology and reduce emissions, said Zhuzhou mayor Wang Qun.

The triangle of Changsha, Zhuzhou and Xiangtan has already been at the forefront of other experimental policies, including phasing out the household registration system.

($1=6.851 Yuan)