SHANGHAI (AFP) - China will join up with the US Chicago Climate Exchange to establish a carbon emission market in the city of Tianjin near Beijing, state media reported Friday.

Tianjin authorities, oil giant PetroChina and the Chicago Climate Exchange will sign an agreement for the exchange, the first in the nation, as early as this month, the 21st Century Business Herald reported, citing unnamed sources.

The exchange, part of government plan to develop the Binhai New Area in Tianjin, will trade permits for emissions of greenhouse gas like carbon dioxide and sulphur dioxide, a source told the newspaper.

Some developing nations like India and China, among the world’s biggest emitters of carbon dioxide, do not have exchanges to trade carbon permits, as they are not bound to slash emissions under the UN climate change framework.

Yvo de Boer, the UN’s top official on climate change said in Beijing Thursday that developed nations must put forward more equitable positions if talks for a new pact to replace the Kyoto Protocol can be finalised by next year.