A market for clean air: China adopts emissions trading to curb pollution

This paper describes China\´s sulfur dioxide (SO₂) emissions trading program, a market-based approach to reducing air pollution modeled on a successful US program launched in 1995. The US "cap and trade program" sets a limit on how much SO₂ a factory or power plant can emit. A facility that produces fewer emissions than the maximum allowed gets the difference as a credit, which it can sell to companies that cannot meet the cap. China\´s cap and trade program aims to reduce SO₂ emissions nationally by 10 percent from its 2000 levels and by 20 percent in certain heavily polluted areas.