Carbon markets emerge in the liberal-capitalist world as a product of a coalition of financial, political, and environmental actors that have common interests in turning GHG emissions reductions into a new commodity.1 Paterson argues that carbon markets have gained prominence because they have enabled the formation of such a powerful political coalition and enabled businesses to imagine a cycle of profits from these markets.2 Carbon markets flourish because they allow capital to accumulate as GHG emissions are mitigated.
This neoliberal model, supported by the discourse of economic rationalism, encounters difficulties in explaining why the idea of an emissions trading scheme (ETS) has found political energy in China. Several ETS trials are currently operating in this country and building the basis for a national ETS, which may potentially become one of the world’s largest carbon markets. However, China is a non-traditional capitalist economy where the vestiges of administrative rationalism...