Emissions violations and funds embezzled

China's National Audit Office (NAO) has discovered that about CYN205 million (USD31.5 million) has been embezzled by Chinese industry from funds set aside to help companies reduce their carbon emissions, and has threatened to clamp down on other violators.

Major sectors in 20 of China's provinces were audited for five years, mainly power plants, steel makers and cement manufacturers. The auditors found mis-declarations of where the subsidies went and misuse of land. The audit went on to say most of the money has been recovered.

While the NAO claims to have recovered much of the funds, there has long been scepticism that China's emissions figures and the governance of carbon credits would be done fairly as local corruption is rampant and statistics are taken with a pinch of salt. The importance of accurate monitoring and enforcement of China's climate undertakings is all the more important when it is remembered that 70 percent of national energy consumption is accounted for by industry.

In part as a reaction to these international criticisms, the NAO is expected to continue with its oversight role and activities concerning land use, mine exploration, forestry development and the use of maritime resources, are next to come under its microscope.

China has allocated CYN 124.2 billion (USD19 billion) to support energy conservancy and emission reduction, but in spite of such large figures, so far only 20 people have been prosecuted resulting in USD1 million in fines.