Abstract: Purpose/Significance The carbon trading mechanism is the most widely implemented, effective and cost-efficient emission reduction measure among the current emission reduction policies. It is of great significance to understand the development status and the research findings of carbon market in the world and China to achieve the goal of carbon peak and carbon neutrality. Design/Methodology On the basis of sorting out the global and China’s carbon emissions, this paper demonstrates the necessity of China’s carbon market construction, and understands the feasibility and effectiveness of the development of carbon market by summarizing the current development situation of carbon market. Finally, the paper systematically reviews the research literature related to carbon market, including carbon emission quota, carbon emission pricing and carbon financial derivatives and the impact of carbon market on enterprise value and innovation. Findings/Conclusions Existing studies have shown that carbon market plays an important role in achieving carbon emission reduction targets and reducing corporate carbon risks, hence the government should vigorously promote the establishment of a unified carbon market and promote its healthy development.