Emissions trading refers to a mechanism for trading legal emissions rights as commodities with the aim of controlling the overall emission of pollutants into the environment and optimizing the allocation of emissions quotas. As a concept, emissions rights trading dates back over thirty years. However, it was not until the advent of the Kyoto Protocol which became effective in 2005, that the international community established the “Clean Development Mechanism” (“CDM”), a global emissions reduction regime. Under this mechanism, every developed country is required to commit to a certain amount of emissions reduction by a specified deadline. Those countries which generate more emissions than their certified emission reduction (“CER”) may purchase CER credits from the countries which have unused CER credits or which are not subject to emissions reduction commitments. In other words, enterprises in different countries may buy and sell rights to emit carbon dioxide by means of climate exchanges in a similar manner as they would trade stocks in stock exchanges.

By Xu Ping, Partner, FDIContinue Reading Establishment of the Tianjin Climate Exchange

Under the United Nation’s Framework Convention on Climate Change (UNFCCC), “developed country Parties should provide new and additional financial resources to support the transfer of technology and take all practical steps to promote, facilitate and finance the transfer of, or access to, environmentally sound technologies and know how to developing country Parties.” However, a UNFCCC report revealed that a large portion of developing nations do not take advantage of CDM projects to import technology.

As long as technology transfer from developed countries is a convenient low-cost means for China to reduce GHG emissions, why doesn’t China have more CDM projects that involve technology transfer? [continue reading to see our analysis]

Wang Rui, Partner, International Trade

Continue Reading Clean Development Mechanism: Untapped Potential

By: Andrew Tan, a Partner Arculli Fong & Ng (in association with King & Wood, PRC Lawyers)


On 6 June 2008, the Government of the Hong Kong Special Administrative Region (the “HKSAR”) announced the “Arrangements for the Implementation of Clean Development Mechanism (“CDM”) Projects in the Hong Kong Special Administrative Region” (the “Implementation Arrangements”). The Implementation Arrangements have been developed following consultations between the National Development and Reform Commission (“NDRC”) of China and the Environment Protection Department (“EPD”) of the HKSAR. The Implementation Arrangements sets out the specific procedures for Hong Kong companies to conduct CDM projects in Hong Kong…Continue Reading Renewable Projects in Hong Kong may Lead to Additional Reward?