The Slatest

China to Announce Nationwide Carbon Cap-and-Trade Program to Reduce Emissions

Two people talk outside a coal powered power plant on the outskirts of Linfen, in China’s Shanxi province, regarded as one of the cities with the worst air pollution in the world.  

Photo by PETER PARKS/AFP/Getty Images

Chinese President Xi Jinping will announce on Friday a nationwide expansion of a pilot cap-and-trade program to limit carbon emissions in the world’s biggest polluter, according to White House officials. The move is an effort by China, which accounts for some 30 percent of global greenhouse gas emissions, to move towards an economy less reliant on dirty energy sources, particularly in its industrial sectors. “How much the new cap and trade program alters that path depends on the level of the nationwide cap,” the Washington Post notes, “[b]ut it will apply to China’s power generation sector, iron and steel industries, chemical firms, and makers of building materials, cement, and paper.”


Here’s how cap-and-trade works from the New York Times:

Under a cap-and-trade system, a concept created by American economists, governments place a cap on the amount of carbon pollution that may be emitted annually. Companies can then buy and sell permits to pollute. Western economists have long backed the idea as a market-driven way to push industry to cleaner forms of energy, by making polluting energy more expensive.

President Obama tried to pass a cap-and-trade program in the U.S. early in his presidency, but Congress rejected the measure, based largely on the belief that enacting restrictions would hurt American competitiveness with China. But a surprise bilateral agreement to cut emissions last year upended that thinking and now, the Times points out, “China appears poised to enact the same climate change policy that Mr. Obama failed to move through Congress.”