China plans to ban new vehicles powered by gasoline and diesel engines. The implications for the global auto industry run deep.The move is spun as an environmen

China has reaffirmed its schedule to launch the world’s largest “cap-and-trade” market for carbon emission permits in 2017. This national carbon market is expected to lower the cost of emission reduction, as China strives to fulfill its Paris pledge of peaking carbon emission by 2030.

China’s recently announced cap-and-trade system to limit emissions is a positive development, but not new. China’s emissions trading system (ETS) has seen some capping, and very little trading. Additional challenges lie ahead in the pricing of carbon and introduction of unified measurement, reporting, and verification systems.

Newly adopted climate mitigations have caused China’s coal and electricity consumption to fall the first time this century. Coal and heavy industries were the most targeted sectors, which has led to more demand from unconventional oil extraction – extraction that could have unintended negative consequences.

Chinese economists predict growth will slow from the current 7% to around 5% if China's carbon emissions are to peak in 2030. Qi Ye posits that climate commitment may constrain China’s economic growth rate, but not necessarily growth itself.

The ambitious U.S-China climate proposal created new emissions standards for U.S. domestic power plants, which will reshape the power sector on a state-by-state basis. The 30% CO2 reduction target is significant and won’t come without domestic political opposition, despite the EU’s even more ambitious targets.

The commitments made at the Xi-Obama summit to reduce CO2 emissions are significant yet challenging for both nations to carry out over the next decade. The U.S. faces a more conservative Congress, and China faces the daunting task of creating to hydro and wind energy sources at a large enough scale. Both sides need to deliver, lest one side fault the other for not fulfilling their commitment.