China is committing to a new program designed to combat the country's pollution levels by setting limits on, and charging companies for their greenhouse gas emissions, The New York Times reports. The cap-and-trade system, which is due to come into effect in 2017, will be announced by Chinese president Xi Jinping during a White House summit meeting with President Obama on Friday. Under the agreement, China's government will place a cap on annual carbon emissions, forcing any firms that go over that limit to buy permits allowing them to do so.

China will also limit public money going to high-carbon projects

The announcement is expected to be the first step in a program that aims to halve China's emissions by 2030. The country is the world's largest polluter, but has worked in recent years to curb its carbon emissions, introducing cap-and-trade schemes in seven provinces in 2012 as trials for the nationwide program. It's hoped that the program, which sources say has been in the works since April, will incentivize Chinese companies to reduce costs by switching to greener energy sources. To further push the issue, The New York Times says President Xi Jinping is planning to set up a "green dispatch" scheme that will offer a price incentive to low-carbon power sources. China will also "strictly limit" the amount of public money that will be given to projects that will result in harmful emissions, and will offer money to less-developed countries who want to invest in low-carbon infrastructure.

President Obama attempted to introduce his own cap-and-trade system during his first term, but was shot down in the Senate — in part because Republicans and Democrats alike feared the policy would reduce the ability of the US to compete economically with China. The inability of the president to produce coherent and strict policies on climate change at home contributed to a stalemate between the US and China on the issue, but sources in the government say that Obama's new regulations on carbon emissions, detailed in August, helped break the deadlock.

Obama's new environmental rules helped break the deadlock

But there is some concern over China's ability to enforce its new rules. Much of the country relies on cheap coal-fired power plants, and it has traditionally resisted outside efforts to review its industries, making it tricky to independently verify that carbon limits are working as intended. In addition, efforts to stop officials using public money to build high-carbon projects may prove difficult, given the history of corruption and nepotism within the country's construction and engineering industries.

Nonetheless, China's new program makes it easier for the United States to enact its own climate change regulations. Republicans and climate change deniers have long used China as the counterweight in their arguments, fighting against any restrictive US policies with the specter of a huge economic power unburdened by controls on emissions, running roughshod over US industries. Now that power is introducing its own tight controls on carbon emissions, President Obama should have more leeway on the topic, and more license to curb the United States' own pollution levels.