Beijing: China, set to overtake the United States as the world's largest carbon dioxide emitter, will soon set up Asia's first carbon-credit exchange in Beijing, allowing the country a head-start in the multi-billion-dollar global carbon market.

The exchange and 12 brokerages in western China, estimated to cost 1.7 million US dollars over three years, will be established with financial backing from Arcelor Mittal, the world's largest steelmaker, which is scouting for major forays into China.

The project aims to establish the Clean Development Mechanism (CDM) technical service centres in 12 provinces, such as Xinjiang, Qinghai, and Inner Mongolia. These centres will act as brokers between international investors and local partners to kick-start "green" investment in China's less developed regions.

The initiative aims to pilot carbon trading in China, build capacity and provide policy input for the expansion of carbon market and reduction of greenhouse gas (GHG) emissions in China, United Nations Resident Coordinator and United Nations Development Programme (UNDP) Resident Representative in China, Khalid Malik said.

"Assisting China in its efforts to cope with the impact of global climate change and to create more sustainable, less GHG intensive development paths is an important focus for UNDP. A range of market-based instruments has now emerged to support this effort, with carbon trading emerging as a major opportunity," he said.