Volkswagen : What does it mean to put a price on the emission of carbon dioxide? Should that be done by means of a carbon tax? And what other political and economic approaches are there around the world? ...

China produces more than a quarter of CO₂ emissions worldwide. The country officially launched its emissions trading system (ETS) in late 2017. The actual start is expected in 2020. Initially the carbon market will only include power plants that produce more than 26,000 metric tons of CO₂ annually - a category encompassing 1,700 plants accounting for approximately 30% of China's total emissions. In a simulated trading period for the ETS, the companies initially receive free emissions certificates. The auctions for the permissions could begin in the coming year.

Originally the emissions trading scheme was slated to cover eight sectors: chemicals, petrochemicals, aviation, iron and steel, non-ferrous metals, paper and construction. Data concerning emissions in these sectors is difficult to collect, however, according to statements. Although the Chinese emissions trading system only affects the energy sector, it will be the biggest in the world.

To establish best practices for the domestic market, China has been experimenting with seven ETS pilot projects since 2013: in the cities of Beijing, Shanghai, Tianjin, Chongqing, the Shenzhen Special Economic Zone and the provinces of Guangdong and Hubei. Though the pilot projects, the government has been able to test trading systems with different profiles. The cities, for instance, generally have high emissions in the areas of buildings and transport, while in Hubei province the biggest source of emissions is the segment iron and steel. The pilot projects will initially run in parallel with the national market in order to cover the sectors missing from the national emissions trading system. As soon as the Chinese ETS is fully functional, they are to be integrated.