Policy of high carbon trading price defended by officials

Chinese officials have defended a much-criticised policy of setting high minimum price levels for global carbon trading, and expressed regret that the country's main pollution contributors such as coal power and chemical industries had yet to benefit from the booming greenhouse gas market.

A fixed floor price on the mainland, the world's top supplier of carbon credits in the Clean Development Mechanism (CDM) market under the Kyoto Protocol, was in line with the international emissions-cutting treaty and in the interests of a stable trading market, they said.

Speaking at the first Carbon Expo Asia, which closed yesterday, Gao Guangsheng, a climate change expert from the National Development and Reform Commission, said China's carbon credit prices, averaging US$10 a tonne, were set at a level sufficient to support the country's drive towards sustainable development.

'There should be adequate room for profits for buyers from Europe and North America,' he said. 'A stable pricing system in China will be conducive to the healthy development of the international CDM market in the long run.'

Although the mainland led in selling carbon credits with its 60 per cent share, a report by the World Bank and the International Emissions Trading Association has expressed concern that the high minimum price for China's Certified Emission Reduction credits would make it difficult to attract buyers.

But Lu Xuedu , from the Ministry of Science and Technology, said by keeping its prices stable, China had helped curb volatility in the global carbon market.