China's Energy and Carbon Cap: How Procurement Functions Should Prepare

Over the last couple of years, China has shown real interest in making their manufacturing sector less carbon intensive. While organizations are closely watching the developments of a potential carbon market in China that could influence their Chinese operations, procurement divisions having high exposure to China should also plan accordingly to accommodate increased raw material costs; a scenario similar to that in Australia after the introduction of the Australian Carbon tax. As export manufacturing constitutes to 30 ? 35% of China?s GHG emissions, any cost on carbon will be passed on to their customers in end-consumer country.