| Welcome to the weekend edition! Every Saturday we'll send you a longer read from other Bloomberg brands, such as Hyperdrive's electric vehicle coverage and the latest in China's journey to net zero. You're receiving this because you subscribe to either our Green or Next China newsletters. If you're a Green subscriber and want to start getting our weekly Next China newsletter, sign up here. If you're a Next China subscriber and want to start getting our daily Green newsletter, sign up here. By Bloomberg News Qian Guoqiang thought his luck must finally be changing. China's surprise declaration last year that it would zero out planet-warming carbon dioxide came on the 22nd day of the ninth month. Qian's office is in No. 922, located on the ninth floor of a skyscraper in Beijing's Dongcheng district. At long last, he thought, this must mean China would start trading carbon. For more than 10 years Qian has waited and waited. He quit a government job in 2010 to co-found SinoCarbon, which he envisioned growing into an army of traders and consultants servicing what would inevitably become the world's biggest carbon market. Back then China had just set targets for reducing its emissions intensity, a measure of pollution as a share of gross domestic product. Qian was convinced one of the next steps would be the creation a national cap-and-trade system to curb pollution.  Qian Guoqiang Photographer: Yan Cong/Bloomberg And that's still the plan—it's just taken far longer than expected. China launched its much-delayed national Emissions Trading System in February, and the first trades are expected to take place mid-year. Citigroup Inc. estimates $800 million worth of credits will be paid for this year, rising to $25 billion by the end of the decade. That would make it about a third the size of Europe's market, currently the biggest in the world. At the Earth Day climate summit hosted by the White House this week, Xi said China will start cutting its consumption of coal from 2026. One possible way of driving that shift would be to make power plants pay a steeper price for emitting greenhouse gases. While Qian's 240 employees are ready to rejoice at these developments, he's not totally buying into the hype. He's watched over the years as officials tried and failed with the carbon market, stymied by coal-industry lobbying, a lack of experience and the sheer magnitude of the task. "There's a long way ahead for the scheme to help cut emissions," Qian said. "We should be cautious to not expect too much too soon." He almost gave up. In the early days of the pandemic, with lockdowns taking hold across China, he found it virtually impossible to get anyone to pay attention to climate goals. The carbon market was, predictably, delayed again. "The atmosphere was grim in our office," Qian recalled. His law school classmates were making good money, and Qian briefly entertained the idea of joining them. "I have long accepted that I can never be rich working on climate," he said, "but climate work has meaning beyond money." Qian and his team have witnessed all the turmoil first hand. SinoCarbon participated in early government research on the carbon market and worked with ministries to develop rules, studying how other countries allocate carbon allowances, audit emissions data, and set up trading mechanisms. It's advised almost 200 local government agencies and thousands of companies on how to improve their emissions disclosures and reduce their environmental impact.  Passes of international climate conferences Qian Guoqiang participated in the past. Photographer: Yan Cong/Bloomberg "You can't imagine how much passion and efforts we poured in it, and how many times we felt lost, " Qian said in an interview at his office. Before President Xi Jinping put his weight behind China's net-zero push last September, the national market for trading emissions seemed to be forever stalled. In 2018, the task of setting it up was transferred from the government's top economic planning agency to the less powerful Ministry of Ecology and Environment. Li Gao, the ministry's director of climate policy, conceded that it was "a big innovation but also a very complicated project." The market will initially cover emissions from more than 2,000 companies in the power industry. The idea is to force utilities to pay for at least some permits to release CO₂, encouraging them to invest in equipment that will use fuel more efficiently. Companies that can cut emissions quickly can sell spare allowances for profit, and those that fail to comply may be fined or have to pay more. Allocations appear to be so generous, and fines for non-compliance are likely to remain relatively benign, such that prices could quickly crash to zero when trading begins, according to research by TransitionZero. China also needs to improve its emissions disclosure and verification system before the market expands to cover as many as 10,000 emitters responsible for about 5 billion tons of carbon a year. Another complication comes from existing pilot markets in eight of China's industrial regions, started as a compromise while policymakers struggled to get the national trading system off the ground. The regional markets led to a glut of carbon credits and disagreements between the government and companies over how they should be integrated into the national system. Then there are questions about how the market itself should function, what emissions should be counted, and how many permits should be allocated each year. Qian knows how challenging it will be to pull off, especially if the end goal goes beyond a functional marketplace to actually cutting pollution inside the world's biggest source of greenhouse gas. Local officials and companies know little about accounting for emissions or even the basics of climate science, he says, and there's a vast gap between major cities like Beijing and Shanghai and industrial provinces like Shanxi and Inner Mongolia. Outlying regions have long relied on coal to fuel carbon-intensive industries; trying to turn that around too quickly could hurt economic growth and cost jobs.  A coal-fired power station on the outskirts of Ningbo, Zhejiang Province. Qian knows how challenging it will be to pull off, especially if the end goal goes beyond a functional marketplace to actually cutting pollution inside the world's biggest source of greenhouse gas. Photographer: Qilai Shen/Bloomberg Still, he can't avoid cautious optimism that this time—after a decade of waiting—is really different. The 43-year-old started thinking seriously about global warming while working on his postgraduate thesis at Xiamen University in the early 2000s. China had just opened up to the rest of the world by joining the World Trade Organization, and anything related to trade policy generated great interest at the country's academic institutions. Qian found himself drawn to the role carbon taxes could play in trade negotiations. He would come back that research after graduation, when a job at the foreign ministry took him to international climate talks in Copenhagen, Bali and Cancun. Qian's government job started in 2005, the same year as the Kyoto Protocol that first committed nations to cutting emissions, and Chinese state media began covering climate change like never before. Newspaper columnists and television anchors argued against emission cuts that would sacrifice economic growth, especially if they were made under pressure from the Western nations responsible for the bulk of greenhouse gases in the atmosphere. Qian understood the sentiment. He grew up in rural Jiangsu province in eastern China, where every year the Taihu Lake would flood and destroy livelihoods. Even as his neighbors watched their houses wash away, people continued to turn large swathes of wetlands into buildings and factories as they sought a way out of extreme poverty. "We developed a high tolerance for harsh environments," he said. "We used to believe that asking developing countries including China to reduce carbon is to limit our right to develop, but gradually we realized committing to the climate fight is in line with China's core interest." By 2007, with China overtaking the U.S. as the largest emitter, air pollution had become a major concern for the country's growing middle class living in cities. That led to new pressure at home and abroad to do more to cut emissions, and by 2010 the country had set long-term targets for cutting emissions intensity. That was when Qian left his government job to start SinoCarbon, a decision that shocked his friends and family. Why would someone who was about to be posted to the Chinese embassy in Washington D.C. leave such a coveted job for something people could barely understand? Just before the Lunar New Year holiday this February, SinoCarbon celebrated its 10-year anniversary in high spirits. Travel restrictions meant the party had been postponed, and many employees had to join virtually, but none of that could diminish excitement after Xi's net-zero speech. One man spoke passionately about how SinoCarbon should be like Apple Inc., innovating new products every year. "I never thought people would understand so soon what I've been doing silently for years," said one young woman employee.  Qian talks to his colleague at office No. 922. Photographer: Yan Cong/Bloomberg Qian stood at the back of office No. 922, smiling and nodding as people recounted difficulties from the long wait. "Everyone from coal companies to oil producers, from environment officials to even culture and propaganda offices, is talking about carbon neutrality," he said. "If last year I was frustrated that the efforts on carbon market were wasted and the result would never come, today I am more worried we can not move fast enough to take all the opportunities." He's been on trips every week since that New Year party as new business pours in. "There's too much to do," he said by phone five weeks later, from Qingdao in the coastal province of Shandong. He was rushing to meet local officials who want to develop a net-zero plan. "We are still waiting for the national online trading to kick off," Qian said, "but to be honest, today what we look forward to is far beyond the carbon market itself, but a brand new green revolution in China." -- By John Liu and Karoline Kan What's going on in China...The world's biggest polluter was the biggest question mark leading up to the White House's climate summit. John Kerry visited Shanghai to try and secure new commitments but came away with vague promises. Xi met with the leaders of Germany and France instead, and agreed to ratify the Kigali amendment to cut hydrofluorocarbons. Some good news: And bad news: | 
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