Mainland officials and business people are expected to scramble to trade in pollution emissions - a market estimated to be worth up to $13 billion a year.
However, analysts warn that while China has been identified as a pioneer among developing nations in the market-based approach to reducing pollution, obstacles such as corruption need to be addressed.
Experts also claim that China is starting to lag behind in tapping international markets.
Emissions trading involves caps on emissions from sources such as factories and power plants. Companies that produce less than the allocated pollution can bank units for later use or sell them to firms that have breached the cap. The purchasing firm can use the credits to reduce its aggregate output on paper.
Credits can be built up by installing equipment to cut harmful emissions at a firm's facilities, investing to ease pollution at another location, using cleaner fuels or cutting operations.
The Asian Development Bank (ADB) told the South China Morning Post the mainland market for sulphur dioxide trading could be worth at least $1 billion, depending on future penalties for pollution associated with acid rain.
