DISPATCH FROM CHINA: China Wades into Carbon Trading, with Caution

Thirty companies in China are negotiating over the game rules for the country’s first carbon emissions trading market.

At the center of this effort is the Tianjin Climate Exchange (TCX), a joint enterprise between the China National Petroleum Corporation (CNPC), the Tianjin Property Rights Exchange and the Chicago Climate Exchange.

The participating companies, including Bayer, Motorola, and several Chinese electric utilities are mapping out a voluntary cap and trade system, where they agree to abide by certain carbon emissions limits. Those that exceed the caps buy allowances from those with surpluses. And the People's Bank of China—the...

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