More and more countries use market mechanisms as an important tool for climate and environmental governance, which has promoted the rapid development of the emissions trading markets around the world. Among them, the EU ETS has by far the best emission reduction effect and the largest scale of transactions. China has also accelerated the construction of a national carbon market after proposing its carbon peaking goal and carbon neutrality vision. This article systematically introduces the historical evolution and development of the EU and China’s carbon markets, conducts a comparative analysis of the two markets by focusing on the key aspects of a market design. It also analyzes the underlying reasons behind the differences in market design, with a view to providing suggestions for the future development of China’s carbon market. The conclusion shows that the construction of China’s carbon market must find an appropriate balance between economic development and carbon emission reduction. In this way, the carbon market mechanism can gradually optimize the industrial structure, encourage the industry to upgrade and replace green technologies and achieve low-carbon transformation, maximize emission reduction benefits at a small social cost, and help achieve the national carbon peaking goal and carbon neutrality vision.