China will throw down the gauntlet to western economies and businesses on climate change when it unveils its own emissions-trading scheme this week.

The unexpected move will, for the first time, place limits on the amount of greenhouse gases Chinese industries are allowed to emit.

A delegation from the China Beijing Environmental Exchange, a government-backed platform for trading environmental equity, will outline the details in New York this week at a UN conference on climate change.

China’s entry into the carbon-trading market holds significant implications for businesses and the environment.

The People’s Republic is the world’s largest polluter, accounting for 20% of greenhouse gas emissions. Thanks to the increasing energy demands resulting from industrialisation, China could be responsible for a third of emissions by 2030.

As a result, it dominates the supply side of the global carbon-trading market. Carbon credits are earned from the creation of environmental projects, generally in developing countries.

If China installs a scheme to cap the emissions of its industries, it would create huge demand for new environmental projects, significantly increasing the value of the market.

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