China and the United States agreed to work together in trying to combat climate change. In a joint statement announced as U.S. Secretary of State John Kerry wrapped up a two-day visit to Beijing, both countries said they would work together “to collaborate through enhanced policy dialogue, including the sharing of information regarding their respective post-2020 plans to limit greenhouse gas emissions.” The two sides have also reached an agreement on implementing five initiatives launched under a joint climate change working group. Those initiatives include emission reductions from heavy duty and other vehicles; smart grids; carbon capture utilization and storage; collecting and managing greenhouse gas emissions data; and energy efficiency in buildings and industry. After touring the Cummins-Foton joint venture set to start manufacturing clean diesel engines in April, Kerry said the two countries were to try to pool their efforts. Indiana-based Cummins has joined with China’s Foton to build the USD350 million plant on the outskirts of Beijing, which will initially produce 60,000 clean engines a year. In the second phase to be launched next year, the company is set to double production.

Tianjin launched China’s fifth regional emission trading market on December 26 as the country deepens efforts to use market mechanisms to fight climate change. A total of 4,040 permits were transacted on the first day of trading and buyers included PetroChina Co, according to the Tianjin Climate Exchange which hosts the market. Each permit gives the right to discharge one ton of dioxide. The permits traded at an average price of CNY29.78, close to the CNY29.50 in Shanghai but far below the CNY67 quoted in Shenzhen. The wide gap in prices means the scarcity of permits varies a lot among different regions and it will take time before China can set up a national market. China has said it intends to create a national carbon trading market after 2015 following the regional trials. Carbon trading is seen as a key tool to help achieve the target of cutting greenhouse gas emissions per unit of gross domestic product (GDP) to 40-45% below 2005 levels by 2020. Shenzhen was the first Chinese city to start carbon trading when it launched an exchange in June. Shanghai was next in November, followed by Beijing and Guangdong province.

The world’s richest countries are increasingly outsourcing their carbon pollution to China and other rising economies, according to a draft UN report. The problem stems from electronic devices such as smartphones, cheap clothes and other goods being made in China and other rising economies but consumed in the U.S. and Europe. The draft of the latest report from the Intergovernmental Panel on Climate Change says emissions of carbon dioxide and other greenhouse gases warming the planet grew twice as fast in the first decade of the 21st century than during the previous three decades. Much of that rise was due to the burning of coal. And much of that coal went to power factories in rising economies that produce goods for U.S. and European consumers. “A growing share of CO2 emissions from fossil fuel combustion in developing countries is released in the production of goods and services exported, notably from upper-middle income countries to high-income countries,” the report said.

China will participate in a legally-binding global climate treaty for the post-2020 period if consensus can be reached among all parties. “If the international community manages to agree on a legally-binding treaty, China will certainly be on board,” Su Wei, Deputy Chief of the Chinese delegation, said on the sidelines of the annual United Nations climate change conference in Warsaw last month. China has promised to voluntarily cut emissions per unit of economic output by between 40% and 45% on 2005 levels by 2020, although it is exempt from cutting emission targets under the Kyoto Protocol. Su Wei said the recent Super Typhoon Haiyan “should be a wake-up call for the world to take immediate action in slowing down and adapting to climate change.” “Finance holds the key to the success of the Warsaw conference,” Su said, urging developed countries to keep promises made in previous climate talks. Developed countries have agreed to jointly provide USD100 billion per year by 2020 for developing countries to better cope with climate change, the Shanghai Daily reports. But it is unclear whether developed economies have implemented their plans of granting USD10 billion to developing economies annually during 2010-12. It is also unknown how they plan to stick to their pledged USD100 billion from 2013 to 2020, Su Wei said. “We are almost at the end of 2013, so it is urgent that we have actual provisions of resources confirmed to achieve the financial goal set by the developed countries by 2020,” said Su. He suggested that the developed countries could start by allocating USD30 billion by 2015.

The Third Plenum of the Central Committee of the Chinese Communist Party last month pledged to launch stricter assessments of local authorities’ “green” performance, and vowed to give more weight to resource efficiency and environmental protection. Cadres will be held responsible for their stewardship of the ecosystem. The plenum resolution listed “environmental protection” for the first time among the government’s five top responsibilities, behind macro-economic management, job creation, market supervision and social management, according to National School of Administration Professor Zhang Zhanbin. The central government pledged to draw an “ecological red line” to limit exploitation of natural resources, and poorer counties in ecologically fragile areas will no longer be required to meet their growth targets. Dr Xia Guang, Director of the Policy Research Center for Environment and Economy under the Ministry of Environmental Protection, wrote in the People’s Daily that “red lines” would not only refer to geological areas that were off-limits to exploitation, but also to better control the use of natural resources and emissions of pollutants, including greenhouse gases. Ma Jun, Director of the Beijing-based Institute of Public and Environmental Affairs, said that although many of the ideas had been raised before, they showed leaders’ intention to strike a balance between economic growth and environmental protection, the South China Morning Post reports.