Australia and China have agreed to new arrangements to strengthen joint efforts to develop emissions trading.
The new arrangements, announced by the Prime Minister Julia Gillard during a visit to Beijing this week, include regular meetings between the two countries to support the development of China's own emissions trading scheme.
Australia has been working closely with China to share information on the design and implementation of emissions trading schemes through technical workshops and joint research projects, and collaboration on economic modelling.
This is in addition to an annual Ministerial Dialogue on Climate Change which began in 2009.
Climate Change Minister Greg Combet said China is drawing on the experience of countries like Australia in the development of its own emissions trading scheme.
During a visit to Australia last month China's Vice Chairman Xie Zhenhua of the National Development and Reform Commission met representatives from the Climate Change Authority, Clean Energy Regulator and the Climate Commission.
"A priority for China is to strengthen its capacity to measure, report and review greenhouse gas emissions. This is a critical prerequisite for a national emissions trading scheme that is credible, cost-effective and can link internationally," Combet said.
“With this announcement, we have agreed to assist China develop methodologies to measure and report emissions from the oil and gas sector, petroleum refineries, coal production and the coking sector.”
China's nationwide emissions trading scheme will be preceded by pilot schemes in seven cities and provinces.
For example, Shenzhen will launch its pilot emissions trading scheme in June. The Shenzhen emissions trading scheme will initially include around 600 companies, which collectively emitted 31.7 million tonnes of greenhouse gases in 2010, 38 per cent of the city's total emissions.
Once up and running, China's national emissions trading scheme has the potential to be the largest in the world – bigger than the entire European Union emissions trading system.
China has pledged to reduce the carbon emissions intensity of its economy by 17 per cent of 2010 levels by 2015 and by 40 to 45 per cent below 2005 levels by 2020.
