China needs CO2 cap to meet climate pledges: legislator

BEIJING (Reuters) - China needs to impose a nationwide carbon cap if it is to fulfill a pledge made last year to bring emissions to a peak by around 2030, a legislator said in a proposal submitted to parliament this week. Wang Yi, a member of the China Academy of Sciences and adviser to China's climate negotiation team, said the country should include an absolute CO2 cap of around 10 billion tonnes for 2020 in its five-year plan covering the 2016-2020 period. China has not published official carbon emissions data but researchers at Tsinghua University estimated the total reached 7.25 billion tonnes in 2010. "A target to control overall CO2 emissions should be a mandatory target in the 13th five-year plan, to be broken down according to variations in regional and industrial development,” Wang said in the proposal, sent to Reuters by email on Thursday. Wang's proposal is based on academic studies into how China can meet a promise to bring emissions to a peak by around 2030, made in a joint statement with the United States last November. "The studies show that it is very likely that energy-related CO2 emissions will peak around 2030 at 11-12 billion tonnes, and will be in the range of 9.5-10.5 billion tonnes by 2020," Wang wrote. Last week, Chinese Premier Li Keqiang vowed to put a ceiling on coal use and to cut carbon intensity - the amount of CO2 emissions per unit of growth - by at least 3.1 percent this year. "We will actively respond to climate change and expand the trials for trading carbon emissions rights," the premier said. China aims to keep coal consumption below 4.2 billion tonnes in 2020, according to a government action plan published last year. If the target becomes legally binding, it will be the first time China has capped coal use. China has established seven regional carbon trading exchanges and aims to create a nationwide scheme by 2016. A mandatory cap on emissions will help determine how big the national market will be. Anything less than a tough and legally enforceable cap is likely to lead to a permit oversupply. Regulators are already wary of repeating mistakes made by Europe's Emissions Trading Scheme, now in the doldrums as a result of a slowdown that has created a 2.1 billion tonne carbon credit surplus. China is likely to regulate 3-4 billion tonnes of carbon dioxide by 2020 and the market could be worth up to 400 billion yuan ($72 billion), a government official disclosed in September. That would be twice the size of the European Union's market, currently the world's biggest. (Reporting by Kathy Chen and David Stanway; Editing by Alan Raybould)