China’s National Carbon Dioxide Emission Trading System: An Introduction

China is on the verge of launching what is expected to be the world’s largest carbon dioxide
(CO2) emissions trading system (ETS). When fully implemented, this program will likely
double the share of the world’s greenhouse gases covered by cap and trade.1 Under current
plans, the facilities covered by the program will eventually account for over 50 percent of China’s
GHG emissions. Internationally, much seems to be riding on this program. If perceived
as successful, it could serve as a model for other countries wishing to implement an ETS. If
viewed as a failure, it could impede the adoption of emissions trading programs in many parts
of the world.