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Retiring permits from the trading system ensures they can't be used elsewhere, reducing overall emissions.
Meanwhile emissions have risen at RWE's German operations since the trading system began.
The Davos crowd owes its prosperity to the trading system the WTO oversees.
In a new book Mr Bhagwati calls them "termites in the trading system".
Listing requirements and the trading system are similar to those of the London Stock Exchange.
She said the trading system could replace five separate enforcement programs that regulate emissions on a plant-by-plant basis.
"And the Chinese were going into every session and chortling about how they were now guarantors of the trading system".
Critics say that when the trading system was put into place in 2005, too many emission permits were created.
The trading system, in operation since 2005, already includes sectors like power generation, chemicals and steel making.
The silver was used in bridewealth payments, and the trading system often involved a loan against a future opium harvest.
That is because the trading system, unlike the tax, will link into a similar system in Europe.
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