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China to create world's largest cap-and-trade program

National system would aim to speed shift from coal

China hopes a cap-and-trade system will prod power companies to scrap coal-fired plants, which account for 90% of the country's electricity generation.   © Reuters

BEIJING -- China is launching a national emissions trading system that could become the world's largest, part of a government push to pivot away from coal and rein in greenhouse gases.

President Xi Jinping first mentioned a nationwide cap-and-trade structure at a China-U.S. summit in September 2015. The plan rolling out Tuesday builds on pilot programs implemented since 2013 in Beijing, Shanghai, Tianjin, Chongqing and Shenzhen as well as Hubei, Guangdong and Fujian provinces. A survey of Chinese carbon markets found that trading of emissions allowances roughly doubled last year to 68.63 million tons.

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