China will announce a national carbon cap-and-trade scheme Friday, a significant move by the world's biggest polluter, and one of the first concrete steps beyond the setting of general goals that President Xi Jinping's administration has taken on the issue. The plan, first reported by the New York Times, was announced by White House officials late Thursday, and will be formally announced in a “joint presidential statement" from Xi and U.S. President Barack Obama on Friday, during Xi's first state visit to the U.S.

Under the deal, which will begin in 2017, China will put in place a so-called green dispatch program, which aims to create a price incentive for business and industry to source power generated using low-polluting methods, and will also agree to strictly limit the amount of public financing that supports projects with high carbon emissions, U.S. officials told the Times.

Friday's announcement follows negotiations that U.S. and Chinese officials said have been going on since April. The initiative also builds on a commitment Xi and Obama made last year, for both countries to limit greenhouse gas emissions beyond 2020, Reuters reported.

Carbon cap-and-trade plans involve governments placing a limit on the total level of polluting emissions that industry as a whole in their country is allowed annually. Permits allowing companies to pollute can then be traded on an open market, making the polluting energy more expensive and providing an economic incentive for companies to use energy from nonpolluting sources. China already has seven regional carbon markets, but there are wide variations in pricing among them.

The plan will be accompanied by a “very substantial financial commitment” from China to help poor countries tackle climate change. The U.S. has already pledged $3 billion to a Green Climate Fund for developing countries, the Guardian reported.

“Expanding a nationwide price on carbon is an important step to help China deliver its climate targets and shift away from coal and toward renewables,” Greenpeace east Asia senior climate policy analyst Li Shuo said in a statement. “In addition, it will place pressure on the U.S. to implement similar measures.”

The joint initiative will be one of the few areas of agreement during Xi's U.S. trip, which comes as the Obama administration is reportedly considering imposing sanctions on China in response to cyberattacks on U.S. companies and government agencies. In addition, Obama is expected to raise other contentious issues, including China's land reclamation activities in the South China Sea, and the recent jailing of a number of lawyers in the country, during meetings with Xi on Friday.

If the operation of China's pilot regional carbon markets are any indicator, the new national plan may struggle to effect serious reductions in the nation's greenhouse gas emissions. Regulatory uncertainty and a lack of transparency were factors that contributed to only about 2 percent of the permits handed out annually being traded during the last two years, Reuters reported.