Ever since the launch of the European Union’s Emissions Trading System (EU ETS) in 2005 it has stood as the world’s largest emissions trading market, contributing over three-quarters of the carbon trading, and has become the most prominent source of investment in environmentally sustainable development. The EU ETS, covering 11,000 power stations and manufacturing plants as well as airlines in the 28 EU states—as well as non-member states Iceland, Liechtenstein, and Norway—was the first international market and has come to be seen as a successful example for other countries aspiring to establish similar systems to help cut industrial emissions.

The EU ETS and its goal of halting the growth of emissions by 2020 is limited by its borders and, as such, calls for international cooperation and support to regain some of the momentum carbon trading has lost as activity has failed to reach expected levels. In this interest, the European Commission initiated a joint project in 2014 with China to support the country’s roll-out of seven pilot programs which tested these systems. China followed on from its experiences in these pilot programs in 2015 when it announced the launch of a nationwide ETS in 2017. Planned to cover as much as $61 USD annually in certificates, China’s market will exceed the size of the EU’s market, $55 USD billion.

While carbon trading markets are certainly only one tool in the quest to halt global emissions growth, the launch of China’s system indicates a strong will towards change which forms a bridge between China, Europe, and the US in the transition towards future sustainability.

Read more in-depth analysis at Bloomberg 

Read about the European Union’s Emissions Trading System (EU ETS) 

Read the Carbon Market Forum’s 2016 assessment of the EU ETS and its viability in the future 

Read about the EU-China cooperation 

Read a Climate Observer report on the performance of China’s pilot ETS’s 

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