Books: Kyoto offsets in Chinese centres

Delving into Local Climate Governance in China, Jens Hein finds Miriam Schröder’s work goes beyond the narrow field of the clean development mechanism to provide a clear but nuanced analysis of complex market issues.

Local Climate Governance in China – Hybrid Actors and Market Mechanisms
Miriam Schröder
Palgrave Macmillan, 2011

With its title,
Local Climate Governance in China – Hybrid Actors and Market Mechanisms, Miriam Schröder’s book claims a position squarely at the intersection of some of the most important issues in the current climate-change debate. China, of course, occupies a unique place in this debate, being at the same time a developing economy and the world’s largest carbon-dioxide emitter. Furthermore, the book’s focus rightly reflects the shift in perspective from state-level governance to local and international processes necessitated by the nature of climate change, and the question of market mechanisms in climate-change governance is one that is hotly debated, in or out of local contexts.

The book concerns itself with the international clean development mechanism (CDM), a process under the Kyoto Protocol that allows emitters in developed countries to offset their emissions by investing in emission-reduction projects, and more specifically with China’s provincial CDM centres: institutions affiliated with local Chinese government and tasked with facilitating CDM projects. Based on four case studies of such centres, Schröder considers their effectiveness as catalysts of CDM diffusion and extracts lessons for environmental governance in general.

The first part of the book provides a brief introduction to China’s system of environmental governance, including the systemic problems caused by the conflicting priorities of central and local government, and environmental and developmental needs. It describes the development of China’s CDM market and sets out the main barriers to CDM diffusion which the provincial centres are intended to overcome.

The book’s central section comprises the four case studies of CDM centres: those of
Ningxia, Gansu, Hunan and Yunnan, detailing their background and framework conditions and assessing their performance in awareness-raising, capacity improvement and project development. In doing so, Schröder relies primarily on interviews and secondary literature, while the contribution to CDM project development is judged on statistics concerning each centre’s “market share” – the proportion of the province’s projects that it has developed.

In the final part of her book, Schröder extrapolates lessons both for improvement of the CDM centre approach and for the role of hybrid (part public-part private) actors generally in delivering effective climate-change governance.

The book is well-structured and lucidly written, making it admirably accessible to both experts and non-specialists, and the analysis is both clear and nuanced. The background chapters are not broad or detailed enough to serve as a general introduction to environmental governance in China, but they fulfil their purpose in setting the context for the rest of the book. Similarly, the highly specific parameters of the case studies are likely to limit their use outside the scope of the study of which they form part – and the author readily acknowledges this.

As is apparent from the case studies, CDM centres vary significantly in their mandate, organisation, relationship with local government and the scale of their initiatives, and this variation is reflected in their unequal success in CDM diffusion. Overall, the impact of the centres is found to be modest, being greatest in awareness-raising and capacity-building during the early stages of CDM market development.

Crucial to the impact of work of each centre is the timing of their activities; centres established early on in the development of the CDM market have a better chance of becoming the focus of local CDM, whereas their relative inability to play a substantial role in market diversification limit their effectiveness in the long run.

The other significant factor in the relative success of CDM centres – and an overarching theme of the book – is their part public-part private status. On the one hand, this hybrid nature gives the centres access to political influence and lends them credibility, but on the other tends to limit their freedom in organisational and management decisions without ensuring delivery of public goods.

Schröder identifies a number of measures designed to improve the effectiveness of the CDM centre approach, chief among them being a clear mandate, improved institutional accountability and a consistent procedure for selecting provincial centres. Also necessary is a coherent business strategy that takes into account the need for the CDM centre’s role to change over time to diversify markets and avoid crowding out other actors.

The picture of CDM centres and hybrid actors provided by Schröder’s book gives a nuanced and useful impression of the conditions under which Chinese environmental governance is shaped, though it must be considered provisional in the absence of more complete data. Measuring the effectiveness of centres based on their market share, for example, yields a better picture of their competitiveness relative to other actors rather than of their absolute impact on CDM diffusion.

Even so, the analysis of the complex and varied nature of the CDM centres is convincing, and succeeds in going beyond the narrow field of its subject matter to make a real contribution to our understanding of local climate-change governance in China.

Jens Hein is programme coordinator in the energy, environment and development programme of
Chatham House, the London-based international affairs think tank.