Publication

From an initial slow start, China grew to dominate the market for carbon credits from the Clean Development Mechanism. This CDKN ‘Inside Story’ explores China’s lessons from the experience, and how China is likely to apply these lessons to a future domestic scheme. The Clean Development Mechanism (CDM) was created under the Kyoto Protocol to enable developing countries to sell carbon credits to developed countries. According to a recent UN Panel Review, the CDM’s future is now in doubt and depends on progress at the global climate talks in Doha later this year. However, China’s extraordinary embrace of the market opportunities afforded by the CDM has provided the country with valuable experience in carbon markets, allowing it to develop and test appropriate systems. China is now well prepared for its next step: the launch of a domestic, emissions trading system.