China’s much-heralded Emissions Trading Scheme (ETS) is already the world’s biggest, having given more than 2,000 power plants a taste of emissions trading, regulating about 4.5 billion tonnes of annual CO2 output from the power industry. Nearly 200 million tonnes of carbon changed hands in the first year of operations at a total value of 8.5 billion yuan ($1.26bn).
A year on, “In terms of the impact, in terms of environmental gains, clearly it’s been limited,” said Matt Gray, co-founder of TransitionZero, a climate think-tank.
Fraud remains one of the greatest challenges and China has yet to fully address it, according to Shawn He, a Beijing-based lawyer who advises firms on carbon compliance. "I’m afraid the penalties for such malpractices … are too small to intimidate."