CDM projects entail many risks related to their implementation in China. Foreign investors are faced with the opacity of a system over which they have little control and whose carbon market has neither legal framework nor effective financial mechanism, whereas the opportunities are there. With a well structured investment, foreign companies, and European undertakings in particular, can benefit from their investments in China by using carbon credits.

Of course, there is some criticism of this carbon credit system in China. Some express reservations as to the credibility of reductions of greenhouse gas emissions in China owing to the fact that there is no body that can check the effectiveness of GHG reductions. Others denounce the fact that the growth of the carbon market in China was promoted by banks and investment funds, which are benefiting from the speculation taking place on this market and which are creating instruments of increasing complexity.

Hong Kong, for its part, offers many advantages to investors in terms of transparency, flexibility and regulatory and financial stability. That is why Hong Kong will probably progress further down the carbon credit road to allow its economic players to fully benefit from the advantages of the Kyoto Protocol and, soon, the Copenhagen Protocol.

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