China’s carbon trading system has been marked by repeated cases of fraud. Companies and consulting firms have forged emissions data and reports. The authorities have not sufficiently verified the reports and conditions at participating power plants. The penalties for falsification have so far been so low that fraud has been more lucrative than compliance and the purchase of carbon credits. „Penalties for non-compliance were ultimately just a business cost,“ says analyst Cory Combs from the consulting firm Trivium China. This paradox will be resolved by recently introduced stricter regulations.