According to NDRC Vice Chairman Xie, once up and running, based on emissions, China's ETS has the potential to be the largest in the world potentially bigger than the entire European Union ETS, which covers 31 countries and over 500 million people.
China's pilot schemes alone are expected to represent the second largest emissions trading market in the world larger than those in California, Australia and New Zealand combined.
Australia's carbon price of $23 Australian dollars per ton of emissions has been lambasted domestically as impractically high, however the Federal Government led by Prime Minister Julia Gillar maintains the policy will convert to a floating price linked to Europe's emissions trading scheme in 2015.
Opposition Leader Tony Abbott has pledged scrap the carbon price if the Coalition wins office, replacing the policy with a " direct action" plan to pay polluters for reducing their emissions.
The Opposition Coalition climate spokesman Greg Hunt has repeatedly said Coalition supports a 20 per cent renewable energy target and will scrap the Labor carbon price.
China plans to launch pilot carbon markets in five cities and two major provinces, with the first to start in Beijing next month. Mr Combet said the schemes would cover a population 10 times greater than Australia's.
The Chinese pilot scheme will apply to companies emitting at least 10,000 tons of carbon annually, less than Australia's threshold of 25,000 tons.
Rather than cap emissions, China aims to cut the energy- intensity of its economic output by between 40-45 per cent by 2020.
Combet said the Sino-Australian partnership would benefit the future of both countries.
"China and Australia are working together to ensure that future generations enjoy continual improvement in their economic, social and health prospects."
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