Carbon market helps cut emissions

He said consultancies that specialize in carbon trading offer a variety of services that could help businesses improve their ability to monitor emissions sources and collect verifiable data. The consultancies can also help companies investigate their greenhouse gas emissions, reduce emissions by optimizing management, technology and corporate structures, exploit potential carbon assets, log accurate records of carbon assets and make a profit from carbon investment.

"Carbon trading is used as a tool to promote energy saving and the reduction of emissions," said Chen of the China Emissions Exchange. "During the process of developing the market, we will provide not only a trading platform but also a wide range of financial support to help businesses build their carbon management and trading systems."

For example, the exchange is planning to help a wind power company issue a 1 billion yuan bond in early September.

Futures and options

Because only carbon credits and Chinese certified emission reductions are tradable in China, experts and professionals have called on the central government to open the futures and options market as soon as possible.

"Without futures and options, it is hard to find long-term investment value in the carbon-trading market and the development and application of low-carbon technologies will be hindered by a lack of funding," said Xiao.

Ge pointed out that carbon credits can be problematic financially and the risks must be countered by risk-management tools, such as futures and options.

The China Emissions Exchange holds a training session once a week, where it provides training for participating companies and listens to their demands. The ultimate aim of the exchange's founders is to build a carbon-trading financial center in China.

"Cultivating the carbon-trading market in China will be a long process. We shouldn't pull at seedlings to help them grow, or dream of huge transaction volumes immediately. That's unrealistic. We've got a lot of work to do to build a solid foundation for the market," said Chen.

Wu Wencong also contributed to this story.