A Los Angeles Time op-ed by Ruth Greenspan Bell about China’s capacity to institute a cap-and-trade program references research by Professor Michael Wara.

When China announced that it would institute a cap-and-trade program to control greenhouse gas emissions, many environmentalists praised the development. They took it as a sign that the world’s second-largest economy is serious about becoming a leader in the fight against climate change

But does China have the institutions to make cap-and-trade, a system suited to Western capitalist countries, work? Or should it apply its own governance traditions — which have functioned incredibly well to create a vibrant economy, develop a highly educated workforce and turn a developing country into a world leader — as principal tools for emissions control?

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There are other reasons to be dubious about greenhouse gas cap-and-trade in China. In a 2007 commentary in the journal Nature, Stanford law professor Michael Wara showed how the Kyoto Protocol-based emissions trading system was being distorted to achieve huge profits while thwarting the policy objectives of reducing greenhouse gas emissions. Projects to control a potent greenhouse gas brought returns to carbon traders that were as much as 50 times greater than the actual cost of installing the relatively simple emission reduction technology. In China, the proceeds were used to build factories emitting the same offending gas.