Darley Shen / Reuters

China's Carbon Markets

How Beijing Is Leading With Cap-and-Trade

China was deathly hot and fevered with excitement about the Olympics, which it was about to host. I was there for a celebration of another sort: the ceremonial signing of an agreement I had helped negotiate to create the Tianjin Climate Exchange (TCX), the first of China’s seven pilot carbon markets. At the time, it was a landmark in the integration of environmental and economic imperatives. TCX would explore how to use a cap-and-trade system and carbon pricing to encourage the reduction of greenhouse gas emissions.   It was a joint venture between China National Petroleum Company (CNPC), a subsidiary of …

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