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The launch also serves as a clear political message: China is serious about fulfilling its climate pledges under the 2030 and 2060 targets, with the latter being China’s goal to achieve carbon neutrality. While the full influence on immediate emissions is expected to take time, the ETS establishes a foundational market that can evolve into a comprehensive pricing system, integrating more sectors as it develops.

Long-Term Outlook and Encouragement of Innovation

A key objective of China’s ETS is to embed the concept of carbon pricing into the nation’s economic fabric. By assigning a tangible cost to emissions, it encourages companies to seek cleaner alternatives—whether that’s renewable energy, energy efficiency, or advanced technologies like carbon capture and storage.