China plans to include a pilot emissions trading system in its five-year plan for economic development until 2015, the Environment Ministry said on Sunday, but declined to comment on whether it would cover carbon dioxide.
The government is already experimenting with small-scale schemes to tackle acid-rain causing sulphur dioxide and other pollutants using market mechanisms.
It has been coy about the potential for expanding these, or adding greenhouse gases to the list of pollutants that can be controlled and traded, but is apparently keen to at least continue exploring their potential.
A trial system for trading in permits to pollute was listed as one of four main emissions reductions goals in official comments about a blueprint for growth in China from 2011 to 2015, which bureaucrats are still thrashing out.
"Carry out trial work on trading emission and pollution permits, and ecological transformation," the ministry said in the statement handed out at a news conference on tackling the country's environmental problems.
The country's top climate change official, Xie Zhenhua, deputy head of the powerful National Development and Reform Commission, declined to clarify how large the trial would be, or whether it would cover greenhouse gases.
China is now the world's top annual emitter, and President Hu Jintao pledged at the United Nations to take on a "carbon intensity" goal that would oblige it to cut the amount of carbon dioxide produced for each dollar of its economic output.
Many carbon traders hope this could pave the way for a market like the one currently used in Europe, and have been rushing to secure a potentially lucrative foothold in China even though it is unclear how easy it will be to make money there.
The Chicago Climate Exchange (CCX), owned by UK-based Climate Exchange Plc, has signed a deal to set up a Chinese emissions exchange, but has declined to say how much it will invest or when trading might start.
French emissions exchange BlueNext has taken steps towards a carbon trading platform in China, joining with the China-Beijing Environment Exchange to offer clients a database of Chinese carbon-cutting projects and a carbon market standard. (Reporting by Emma Graham-Harrison)
