No other country has adopted clean development mechanism (CDM) projects to the degree that China has. China produces roughly half of the world's certified emissions reductions. This makes understanding the process of CDM project adoption in the country both crucial to understanding the CDM and to finding ways to increase adoption worldwide. In this book, Miriam Schröder analyses the role of Chinese provincial centres in developing local capacity and adopting the mechanism, through a study undertaken during 2007 and 2008 of four provincial CDM centres coupled with interviews of 74 non-Chinese participants in the China CDM market. She found that provincial centres in Ningxia, Gansu, Hunan and Yunnan have varied set-ups, ranging from a more government-led style, such as in the Ningxia centre, to those which were relatively private business-oriented, Hunan being a good example of the latter. The diversity in political frameworks resulted from the lack of a central government directive on the establishment of CDM centres. These four centres were chosen because the provinces’ levels of economic development were relatively low and comparatively similar in terms of potential for energy projects. That said, differing foreign donors influenced each centres’ structure and performance, while varied natural endowments led to the adoption of divergent projects. For example, Yunnan and Hunan adopted a large number of hydropower projects in contrast to Ningxia, which developed many wind power projects.

Schröder found that contrasts in ownership and operation lead to differing incentive structures. For example, the Ningxia centre got off to a good start with strong government support and was successful in its early phase, whereas the Hunan centre was a private company only loosely affiliated with the provincial government, and as such excelled in the later phase of marketing CDM development projects. Based upon her investigation, Schröder concludes that the centres with strong government input were best at the public service and early stages of CDM implementation, whereas the more privately managed centres were better at the market-oriented and business side of project development in the later phases of a centre's life.

Schröder mentions innovation theory and outlines what the function of market facilitation services should be. She focuses on project development, awareness, creation and capacity development as the areas that can indicate a provincial centre's contribution to market development. At the same time, she notes that provincial centres compete with private business and government organs such as the National Development and Reform Commission. She concludes from her surveys that for the CDM centres to perform all of their designated functions, there needs to be an improved structure with a stronger public input working better in the early stages and a stronger private input working best in the later stages. At the same time we are told that this theoretical division between public and private is inadequate as the current “hybrids” fail to perform all functions successfully.

The overall performance of provincial CDM centres is seen as being focused more on profit-making while neglecting public goods provision. The centres seem to be lacking the right mix of incentives to effectively do both and, as such, there is a need to make the analytical divide more sophisticated. Schröder believes that getting the incentives correct is most important and suggests that agencies, professional NGOs, quangos or some other entity external to the hybrid centres might take a controlling role of public goods provision. Finally, she notes that these centres have changed the game. New attitudes have evolved and more business people in China are seeing adoption of climate protection measures as a “business opportunity.”

This study is a must for anyone interested in climate change policy on the ground in China. The author has done a good job at marrying political economic concerns with a description of how CDM centres function in China. It must be said that the text might have been restructured in a way to reduce repetition and there is a technical fault: the graphs must have originally been done in colour as they are often difficult to decipher in the book's black and white form. Despite these minor problems, the reader comes away with an enhanced knowledge of the problems of local CDM implementation in China and the theoretical considerations that can lead to an improvement of this important process for the future.