In an earlier publication, RAP presents a number of “key lessons” from international experience for countries designing market-based mechanisms to reduce greenhouse gas (GHG) emissions. This paper builds on that earlier publication, providing more details on the international experience, and explaining how that experience fits with the “key lessons” in a Chinese context. We focus here on the existing examples of cap-and-trade style systems (also referred to as “permit schemes”) in New Zealand, the European Union, Tokyo, and the northeastern United States. We also discuss California’s planned cap-and-trade scheme.While noting certain difficulties of design and implementation, we still encourage the adoption of market-based mechanisms, not least because they will be an aid in developing the institutional infrastructure needed to support broad GHG reduction goals. In particular, as has been the case in other countries, even an attempt that is not fully successful may lead to improved institutional capacity. Potential results include setting regional and national emissions targets, emissions monitoring, reporting, and verification (MRV), disseminating information on emissions and emissions reductions, and mobilizing capital for effective investment in energy efficiency.