‘Er … perhaps you should explain this to Winchester,’ she said after reading the note. ‘I don’t think he’d sign this for me.’
She took me down to Winchester’s office and left me outside the door. I knocked hesitantly and a voice from inside barked, ‘Come!’ Inside, there was a couple of worn leather-backed chairs arranged around a fireplace, with a table strewn with teacups and a plate of half-eaten scones. On the sideboard, a decanter and some glasses stood on a tray next to a couple of old sherry bottles, and over the mantelpiece there was a photograph with rows of men in uniform graduating from Sandhurst.
‘I hear Mina called you in for a recce,’ said a tall man, folding up a copy of the Daily Telegraph and rising stiffly from the desk. Behind him, a set of French windows opened out onto the garden and the breeze ruffled a few papers on the desk. On the wall, there was a large map of Eastern Europe, a sign, perhaps, that the Cold War was still in full swing in Mayfair. ‘Jolly good,’ he continued. ‘Jolly good. Tiresome business, this – the old girl seems a bit down on her chinstraps so it’s good to have you on board. There’s a lot hanging on this mission, you know.’ He paused and looked at me more closely. ‘In mufti today are we?’ he said, raising his eyebrows and peering at my clothing as if over a set of imaginary spectacles.
‘Er, well sort of,’ I replied weakly, scratching the stubble on my chin and trying to cover the holes in my trousers. ‘Let’s just see what they want first, shall we?’ I said, trying to sound more cheerful. I handed over the letter.
Respected Chief Engineer Wang: Hello!
My side, at the day in front of now, received your valuable side’s telephone and felt ten-out-of-ten happy. We straight through believe, through twin sides’ effort and sincerity, our project fixedly will succeed. Now, if your side, amongst a hundred busy things, pulls out a length of time, my side shall grasp fully empowered representative Project Director Mina and send her respectfully to visit your valuable factory for friendly negotiations on top of the spirit of mutual benefit and equality also. According to my side’s arrangement, Project Director Mina arrives at Hangzhou at the day behind tomorrow. Ask valuable side to confirm that arranging.
Ten thousand things just as you please!
Delivered from,
Winchester
Winchester didn’t get much beyond the bit about ‘receiving your valuable side’s telephone and feeling ten-out-of-ten happy’ before he swelled to a purplish hue, and I found myself abruptly dismissed from the room. I heard later that as soon as I left, he called Mina over an intercom and exploded. At first he refused to sign the letter, ranting that it looked as though it had been written by a six-year-old and demanding to know how she could have contemplated asking such a dishevelled-looking halfwit to represent the company in China. But eventually peace returned to the offices; the letter was rearranged into a more recognizable form, Winchester signed it, and it was sent over to Beijing. Wang replied the next morning. By the following evening, only a few months after arriving back in England, I found myself on a plane out to Hong Kong.
UP IN THE SKY THERE IS PARADISE, BUT DOWN ON THE EARTH WE HAVE HANGZHOU fn1
—from Illustrious Words to Instruct the World, by Feng Menglong, c. AD 1620
As I threw a few things together for the trip out to China, I knew that I was dealing with an explosive mixture. On one side, Winchester seemed nervous and volatile. He was under tremendous pressure, knew little of China, and was working through a harassed and exhausted negotiator. The syndicate was fragile and he wasn’t in control. On the other side, Mina’s descriptions suggested that Wang was a wily and experienced operator with a number of different options to choose from. The project could be worth a lot of money and other buyers were already circling. On the surface, it looked as though Winchester had a lot more to lose than Wang. I knew that a good Chinese negotiator would sense that and know how to extract maximum value. Finally, Cordelia was lurking unpredictably in the shadows. I knew almost nothing about the carbon industry and had none of the specialist vocabulary even in English, so I felt unsure of myself. When I arrived at the airport with an hour to spare, I found the business lounge and pulled up a computer. I was searching for websites with the technical terms in Chinese when Mina came bounding up behind me. Later she admitted to me that her heart had sunk when she found me there. Winchester had already concluded that I was a halfwit and now she’d seen from my Web search that I didn’t even know the Chinese for ‘carbon credit’. With more than €150 million of carbon hanging by a thread and one last chance to recover it, she knew that her job was on the line.
As the plane flew over Russia and on into the night, I could see from the bundle of papers that Mina had dumped on my lap that IHCF had agreed to buy carbon credits from the chemical factory in Quzhou for a period of five years. At the back of the files, behind bundles of contracts and spreadsheets, I found some background information on the carbon industry. It explained how there was a growing demand for emission allowances because the European Union and Japan had agreed to impose strict limits, or ‘caps’, on big greenhouse gas emitters, including power stations, steelworks, chemical factories and cement plants. If any of the plants failed to meet the cap, they had to go into the carbon market and buy emission allowances, which were expensive. The system was known as cap-and-trade and had some similarities to the system that had been used in the United States to cut back on gases that cause acid rain. The idea was to force businesses to pay for emissions they made in order to create an incentive to reduce them. The emission allowances came mainly from the EU and Japanese governments, but the United Nations was also involved and could issue equivalent allowances, called ‘international offsets’ or ‘carbon credits’, from projects that reduced greenhouse gases in developing countries. IHCF intended to buy carbon credits from the chemical factory in China and sell them in the European markets to companies that needed additional allowances in order to meet their caps. From the figures included in the investor proposal, it was clear that carbon trading in Europe had taken off in a big way. In the previous three years, the market in Europe had grown from a few hundred million to around €60 billion.
The documents were full of jargon and acronyms that were difficult to follow but I figured out that the UN could issue carbon credits under something called the Clean Development Mechanism, or CDM. Over the past decades, emissions had soared in China, India, Brazil and parts of Africa as these countries began to industrialize. The CDM aimed to encourage the use of low-carbon technologies in the developing world by providing an opportunity to make money from the sale of carbon credits. If a project based on low-carbon technology was too expensive and wouldn’t make returns by itself – as was often the case – developers there could apply to the UN to generate credits and boost their profits so they became financially viable.
On the surface, the CDM seemed like an imaginative way to help reduce the carbon footprints of the vast new infrastructures being built in the developing world. It didn’t just apply to chemical plants; cement factories, coal mines, ironworks and steel mills could all apply for credits if they led to lower emissions. The most important area seemed to be the power sector, which was encouraged to move away from coal, but by far the largest number of credits seemed to come from projects aimed at cutting industrial greenhouse gases from chemical plants in China. While I still wasn’t clear about the technical details, it was obvious that IHCF thought they could make a fortune from the deal.
We changed flights in Hong Kong and by late morning, we had arrived