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Launch of Study Signals a Proactive Approach to Clean Mechanism in China

July 14, 2004 - A joint study on the Clean Development Mechanism (CDM) in China, Taking a proactive and sustainable approach, was launched last week at an international conference in Beijing. The event, which represents the culmination of a two-years partnership effort between the Governments of China, Germany, Switzerland, and the World Bank, attracted more than 250 participants from Chinese Government agencies, multilateral and bilateral development organizations, and the private sector.

The Conference followed a landmark regulation on CDM by the National Development and Reform Commission and the Ministry of Foreign Affairs of China on June 30, 2004-a day before the conference. The regulation set the "rules of the game" for the management of CDM projects.

In essence the CDM allows developed countries to earn Certified Emissions Reduction credits, which count towards their own Kyoto commitments, by investing in clean technologies that reduce carbon emissions in developing countries. "The CDM is seen as an essential tool for the mitigation of climate change in a fair and equitable manner through North-South partnership"---said Teresa Serra, Sector Director for Environment and Social Development in her keynote speech. 

Discussions at the conference focused on the results of the study, development of carbon markets, China's policies and institutional arrangements for CDM application, and strategies to remove CDM implementation barriers. According to estimates, China's share of the world carbon market is potentially around 50 percent.  "This project has been a very important step in the development of a proactive and sustainable approach to CDM in China"---say the authors of the study. They go on to suggest that, "the energy sector, in particular, could benefit from new approaches in efficiency and renewable energies."

 Participants at the international conference in China

The study confirms the need for capacity building through continued analytical work, policy dialogue, and CDM project development. Analytical assistance to develop CDM methodologies and analyze greenhouse gas (GHG) emissions reduction potential has been provided in a number of countries with multilateral support channeled through the National Strategy Study (NSS) program. "Technical support of this kind is important because the CDM presents governments and the private sector with complex challenges in areas where they often have very little experience." Says Eduardo Dopazo, team leader of the NSS program at the Environment Department

The conference laid down the foundation upon which the Chinese Government can develop policies and an overall strategy to make the CDM opportunities a reality. Several carbon finance projects are being discussed with Chinese counterparts.

The study, Clean Development Mechanism in China, is available here:

To learn more about the Bank's work in China, visit:


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