China's national carbon credit exchange likely delayed to 2016-2020

The mainland will not be in a position to form a national exchange to trade carbon emission rights until after 2015, according to an  official of one of seven pilot exchanges.

It will take time for the nation's seven pilot exchanges to build up sufficient data-collection infrastructure and trading rules, let alone operate smoothly and come up with a model that works nationwide, said David Tang Yue-tan, secretary of the board of Tianjin Climate Exchange.

"China has committed to developing many different carbon markets over the next three years, and hopefully a national market sometime between 2016 and 2020," he told a climate-change investor forum.

"In the past, rumours had it that that a national market could be up and running by 2015. But, I can assure you, that is just not feasible."

Besides having good data, the exchanges would also need reliable and independent verification of the information submitted, he said, adding that a certain degree of liquidity was necessary for efficient price discovery, which meant that financial intermediaries would be enlisted.

China has not signed binding international agreements on carbon emission reduction. It has said it would aim to reduce its energy intensity by 17 per cent between 2011 and 2015. Intensity is measured by emission per unit of gross domestic product.

In late 2011, Beijing ordered carbon exchanges be set up in pilot form. There was to be one in each of Beijing, Tianjin, Shanghai, Shenzhen and Chongqing, as well as the provinces of Guangdong and Hubei, by the end of 2013. On Tuesday, the Shenzhen one will become the first to start operating.