China will announce a drastic environmental plan that some US lawmakers have been trying to pass for years

China's president Xi Jinping will announce an ambitious plan to reign in harmful greenhouse gas emissions, The New York Times reports.

The plan - which is meant to encourage the use of clean energy sources by putting annual limits on the amount of carbon pollution that can be emitted - represents a significant step for the world's second-largest economy.

The agreement could help set the tone for global action on climate change, particularly in the US where progress on the issue has been slow to date.

China's plan, to be announced by President Xi Jinping Friday, features some of the hallmarks of the cap-and-trade program US economists have developed, including:

• yearly caps on carbon emissions
• allowing companies to buy and sell rights to pollute

Additionally, China's plan is expected to feature a so-called "green dispatch," strategy that would incentivize the use of green energy.

Such measures are meant to "drive industry to cleaner forms of energy," The Times notes, while making the dirtiest forms of energy production more expensive.

A similar cap-and-trade measure touted by the Obama Administration failed to make it through Congress in 2010, but iterations of the program exist in several states, including California.

President Obama last month unveiled a major new plan to cut emissions from US power plants. Obama called it "the single most important step" America has ever taken to fight climate change.

Officials from China met in Los Angeles last week, reportedly to discuss collaborating with California's existing cap-and-trade program, according to people who attended the meeting, as cited by The Times.