Shanghai and Guangdong recently released draft regulations regarding their emissions trading pilot programs. Together with the Bureau of Environment of the Tokyo Metropolitan Government (Yuko Nishida), the US Environmental Protection Agency (Jeremy Schreifels), and the World Resources Institute (Kevin Kennedy and Song Ranping), the Regulatory Assistance Project (Max Dupuy and Chris James) offers these comments on the draft regulations. Drawing on international experience with emissions trading and our understanding of the situation in China, we provide recommendations in several areas, including the coverage of emissions, establishing the cap, designing an emissions trading scheme within the context of other emissions reduction policies, allocating and banking allowances, offset credits, monitoring, reporting, and verification, and transparency.