Beijing to host first carbon credits exchange in developing world

China and the United Nations (UN) are planning to launch the first carbon-trading exchange in the developing world in Beijing.

The Chinese Ministry of Science and Technology and the National Development and Reform Commission, with the support of the United Nations Development Programme, hope to launch the exchange this year, setting Beijing up as a centre for foreign investors to buy carbon credits from Chinese enterprises.

The UN estimates that China will account for 41% of the carbon credits it issues by 2012. Carbon credits are issued by the UN to developed countries that invest in projects to reduce carbon emissions in developing countries, such as building wind farms and hydroelectric projects.

The participants hope the exchange will be the first to issue carbon credits tied to the UN’s eight Millennium Development Goals (MDG), which aim to halve extreme poverty and ensure universal primary education by 2015, among other targets. The idea of MDG-linked credits dates back to a UN climate-change conference in Montreal in December 2005, and would appeal to socially-responsible companies. The UN plans to encourage Chinese investors to back projects that help reach the MDGs, as well as cutting emissions.