Abstract: The paper summarizes the research and application results from the three steps of the SO₂total emission control and emission trading policy in China. The static mixed-integer linear optimization model （YRDEGS） was used to analyze the SO₂control cost savings, installed FGD capacity differences, variable cost savings, SO₂allowance market size as well as the SO₂control cost increase during the trading and no trading scenarios. The following conclusion was drawn, that there are 38% savings of the SO₂control cost could get from emission trading in the 2000 power generation level and with a 20% SO₂reduction; 6.3 GW FGD capacities could be saved from installing; with the increase of power generation, there will be a bigger market for the SO₂emission trading; compare with the more stringent SO₂control policy, the allowance market is more sensitive with the increase of the power generation; with a 20% decrease of SO₂emission, the SO₂control cost should be around 3 billion to 4.5 billion yuan; and the full trading with owner floor, the cost should be around 0.6 billion to 2.85 billion yuan; at different level increase of power generation, with emission trading there are about 1.7 billion to 2.4 billion yuan cost saving of the SO₂emission control.