This report is not a comprehensive overview of Chinese environmental policy; it intends to act as a starting point for those wishing to better understand why and how China is slowly changing to adopt progressive policy instruments to tackle growing environmental concerns. Sandbag is particularly interested in the proposal to develop pilot emissions trading schemes as a precursor to establishing a national emissions trading scheme (ETS). It would be absurd to suggest that China is facing anything but an environmental catastrophe if it fails to act soon. It would be equally ridiculous not to look at China in context, a vast country experiencing rapid growth coupled with an increasing dependency on natural resources. We purposefully liken China’s task of low carbon development to turning a tanker; a process that requires both time and patience. China has – as this report sets out to show – started to adjust the rudder, but it will take time for this behemoth to come about.