Share this on Twitter Share this on Facebook Share this on LinkedIn Share this on Sina Weibo Share this on Wechat Share this on LinkedIn Credit: Matthew Brown/AP Photo The EU is serious about decarbonization. Over the next twelve months, Brussels will finalize a massive energy and climate package, “Fit for 55,” that aims to accelerate progress towards net zero carbon emissions over the next decade. It is the EU’s most ambitious green effort yet. Though it will apply only within the bloc, its consequences will be felt globally — and, of the world’s major economies, China has the most to lose. At the heart of the proposals is carbon pricing. The idea is to internalize the cost of pollution by forcing producers to pay for each ton of CO2 they emit. The EU has long had a carbon pricing mechanism in place — the Emissions Trading System (ETS). ETS allocates a fixed number of pollution permits to certain industries and allows firms to trade them at a market-determined price. Strengthening the ETS mechanism further is a cornerstone of “Fit for 55.” However, ETS currently provides a much weaker incentive for firms to decarbonSubscribe or login to read the rest. Subscribers get full access to: Exclusive longform investigative journalism, Q&As, news and analysis, and data on Chinese business elites and corporations. We publish China scoops you won't find anywhere else. A weekly curated reading list on China from David Barboza, Pulitzer Prize-winning former Shanghai correspondent for The New York Times. A daily roundup of China finance, business and economics headlines. We offer discounts for groups, institutions and students. Go to our Subscriptions page for details.