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Many economic studies suggest that China would reap significant
benefits from participating in a global cap-and-trade regime.
The question then is that even if such a regime is so beneficial
to China, why China has consistently refused in international
negotiations even to discuss its participation in it. In this
paper, we look at this issue from the following perspectives: a)
from the point of view of fairness, how do developing countries
including China and India perceive emissions caps in the first
place?; b) why have China and India been sceptical to
international emissions trading?; c) how is an inflow of CDM
investment in China perceived politically in comparison with the
exports of emissions permits to the U.S.?; d) what are the
implications of “lock in” to emissions cap, in particular no
rules and principles for setting emissions targets for the
commitment periods subsequent to Kyoto?; e) how to address the
complex undertaking of setting em