NEW YORK (Business Wire) - American International Group plans to provide funding to support projects that reduce or sequester greenhouse gas emissions, through the purchase of carbon dioxide emission offset credits, in the Xinjiang and Sichuan provinces of China.

The proposed projects will generate 310,000 metric tons of carbon dioxide offset credits from farmers in these two provinces. This amount represents roughly one-half of the emissions attributable to AIG's global operations-as determined by the company's 2006 greenhouse gas emissions inventory. AIG plans to then retire the credits as part of its environmental strategy.

"AIG's overall plan is to mitigate - through offsets, energy efficiency and purchases of renewable energy - the greenhouse gas impact of its global business operations, as well as to reduce other aspects of its environmental footprint," said AIG president and chief executive officer Martin Sullivan. "We're looking forward to moving ahead quickly on these projects. They set the stage for additional environmental initiatives currently being considered in the US."

The Xinjiang and Sichuan projects are being developed by US-based Environmental Defense. Among the most notable benefits, the projects will allow crops to be grown with lower consumption of water and fossil fuels, promote more efficient use of nitrogen fertilisers, produce biogas gas from human and agricultural wastes for cooking and lighting, and help retain water, control dust and reduce soil erosion through trees planted in desert lands.

"AIG is proud to contribute to a sustainable solution that benefits the people of China," added Olin Wethington, chairman of AIG companies in China.

"Not only are we committed to aligning our business to China's growth, but we are also focused on improving the quality of life in rural parts of the country."