But what of a full-fledged carbon trading system based in Asia, one that can use market forces to get companies there competing to reduce emissions? The only game in town, Asia Carbon is struggling to establish itself amidst bureaucratic problems and general confusion, but it pushing on nonetheless. And at the booths at this year's Carbon Expo Asia, to be held in Beijing in October, are sold out. And what of white elephant China? Despite some major hitches to carbon market participation, at least one company in China has joined the CCX. In April, its chairman proclaimed the whole idea (with not a trace of Marxist irony), "a successful endeavor in using [the] free market for environmental protection."
An Indian environmental group and the Chicago Climate Exchange (CCX) have signed a deal that will make it possible for US companies to offset their pollution by funding climate-saving projects in South Asia through the carbon trading exchange. Essentially, Tata Energy and Resources Institute of India (TERI) will ensure that greenhouse gas-cutting projects in India, Sri Lanka, Pakistan, Nepal, Bhutan and the Maldives meet the standards of the CCX; corporate members of the CSX then buy "the right" to pollute (or, if you like, the right to claim eco-friendlieness) by buying credits that fund those projects (see a more complete explanation here). While this is nothing new per se -- the Kyoto Protocol established such a "clean development mechanism" (CDM) in 1997 -- critics have claimed that the green projects developed countries were funding in developing countries weren't very green at all (there are of course the philosophical issues too). But by linking with an environmental group on the ground, the CCX can ensure that such projects are clean -- or at least cleaner.In supporting initiatives around solar energy, bio-fuel, reforestation and other renewable and efficient energy initiatives particularly in rural areas, the agreement looks like it could help to improve both the economic as well as the environmental well-being of needy communities (and doubly so, since green and green are so closely tied). At the same time, it may also help to get the region more excited about climate trading schemes. Foreign interest continues to grow in green projects located in nations like China that can be funded through the EU's mandatory carbon trading scheme and the UN's global market (set to open in 2007).