The effects of climate change and pollution threaten major Chinese industries and could reverse years of growth in their economy. As one way to combat climate change China signed the Kyoto protocol in 1997. The Kyoto protocol established emissions goals for each country and an emissions trading market. Countries that failed to meet their emissions goals could purchase Certified Emissions Reductions (CERs) from other countries. CERs could also be awarded by the United Nations Framework on Climate Change (UNFCC) to countries through a Clean Development Mechanism (CDM). In this way, countries could invest capital in reducing emissions anywhere in the world it was cheapest to do so, while also providing capital investment to under developed economies.
Initially, China received only a small portion of CDM contracts. But beginning in 2006, and every year since, they have received the majority. This meteoric rise has produced hundreds of clean energy projects and been a great boon to China’s economy. In order to capture this market China had several novel approaches not undertaken by other countries, but valuable to consider for clean project administrators moving forward. These include: