On Tuesday, China officially announced that it would create the world’s largest carbon trading system, meant to help the country meet its ambitious climate change and clean energy targets. (The country wants to get 20 percent of its energy from renewables, and peak its emissions, by 2030.)

It can be difficult for Americans, most of whom don’t track China’s carbon policy very closely, to understand the significance of such developments, so let’s try to put it in context.

To make a long story short: Yes, a comprehensive carbon trading system covering the world’s largest emitter will, eventually, be a Very Big Deal. But Tuesday’s announcement was neither the beginning nor the completion of that effort, only a signpost on a path that the country is navigating with great care.

It’s an exciting signpost, though!

Thomas Peter – Pool/Getty Images

China is building its carbon trading system slowly and deliberately

Back in 2011, China’s government laid out a plan to gradually create a national carbon market. (It appeared in the country’s 12th Five-Year Plan, covering 2011-’15.) The key word here is gradually.

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