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How can Chinese government carry out emission reduction?

The Chinese government is considering introducing a carbon credit regulation scheme next year as part of a detailed and practical plan to assess the efforts made by automakers towards cutting greenhouse gas emissions.

According to a draft regulation that was released earlier this month, carbon credit will be calculated according to the amount of reduced carbon dioxide emissions from the use of new energy vehicles manufactured in or imported to the country.
The credits should be handed in before the end of the year to the agency under the State Council, and extra credits traded on the nation’s official carbon credit market, due to be rolled out in 2017.
Automakers who expect to produce more carbon emissions than agreed will be able to either purchase credits on the market. Failing to hand in the required credit after a certain buffer time, would end up with their following year’s credits reduced according to the excess emissions produced. Each credit in short would incur a penalty, charged at three to five times the previous year’s annual average credit price.

Government set to roll out carbon credit scheme