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Chinese carbon pollution: Buy or sell?

The Chinese city of Shenzhen is seen in the distance beyond a landfill.

Today, China launches a new pilot carbon market in the southern city of Shenzhen. Carbon cap and trade schemes have had a hard time getting off the ground in other countries. Can China make it succeed?

China is requiring 635 companies to purchase carbon permits for trade in the new market. Durwood Zaelke, president of the Institute for Governance and Sustainable Development, hopes it will succeed though it hasn’t worked well in other countries.

“There’s been cheating, there’s been bogus credits created and sold in different European markets," Zaelke says.

Anyone who’s operated in China knows that cheating and bogus-anything is synonymous with doing business there. So, Zaelke has a question for China:

“Is China able to learn how to do compliance?" he asks. "Because if you don’t have strict compliance when you’re doing a trading system, it will not work.”

If China is able to make its first carbon market thrive, Beijing has promised to launch a national carbon market in 2015.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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