Current Opinion

Carefully selected insights and analysis from China’s thought leaders on climate change and the low-carbon transition

As China seeks to advance its electricity reform, it is crucial to shift focus to the user side

Zhao Kebin, former Senior Director of Power Construction, Datang Gansu Power Generation Co., Ltd

To deepen electricity reform, the most urgent task is to increase user participation in the market. The government has set the framework, and grid operators, generators, and power companies are already involved. However, many users remain at a disadvantage when it comes to shaping policy, understanding the market, and participating in trading. It is crucial that users become more proactive and participate more effectively, otherwise competition in the new energy market will simply become a zero-sum game involving only the power generation side.

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Highly sensitive to climate change, China is facing significant shifts in its climate system

Yuan Jashuang, Deputy Director of the National Climate Center

As a region highly sensitive to and significantly affected by climate change, China is facing significant shifts in its climate system in diverse aspects.

With global warming, higher emissions are expected to drive more frequent, severe, and dangerous extreme heat events. Over the next 30 years, China’s average maximum extreme temperature is projected to rise by 1.7 to 2.8°C, with the biggest increases occurring in the eastern regions and western Xinjiang. Additionally, the average number of regional heat wave days is likely to rise by 7 to 15 days. Under high-emission scenarios, these extreme heat events could become a regular occurrence, happening once every 1 to 2 years, compared to the current rate of once every 50 years.

In the future, extreme precipitation events in China are also expected to increase faster than total precipitation, with greater variability and intensity. Over the next 30 years, five-day maximum precipitation is expected to generally increase nationwide, with more than a 10% rise in the eastern parts of Northwest China and the Huang-Huai River Basin.

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It is essential to refine the structure of green financing to solve the investment overheating in the PV and wind power sectors

Wang Yao, Director, International Institute of Green Finance, Central University of Finance and Economics

Currently, most funds raised through major financial tools such as green loans and green bonds are directed towards the clean energy industry and the green upgrade of infrastructure. In particular, the photovoltaics and wind power sectors have experienced issues with overheating and intense competition in green funds. It is essential to refine the structure of green financing to fully support projects in new energy, green transportation, green buildings, green manufacturing, and other fields. This will enhance the efficiency of fund and resource utilization.

Renewable energies such as wind and solar power are poised to become the primary sources of energy supply. There are also significant investment opportunities in the development of complementary energy storage technologies such as battery storage and hydrogen energy. Furthermore, the new energy vehicle industry offers promising investment opportunities, with infrastructure development, such as charging stations, battery swapping stations, and hydrogen refueling stations, promoting rapid industry growth. Additionally, the green finance sector itself is poised to emerge as a key investment area, encompassing various aspects that will attract investor attention. As trading expands and the market diversifies, China’s carbon market is expected to provide clearer mechanisms for pricing carbon assets and cost transmission.

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The onset date of the first high temperature period in China is advancing with extreme and compound weather events

Wang Guofu, Director, Meteorological Disaster Risk Management Division, National Climate Center

The first high temperature period in North China and the Huang-Huai region (between the Yellow River and the Huai River) has arrived earlier than usual this year. Based on the current assessment of meteorological disaster risks, by July 14 China will face compound disasters such as high temperature combined with heavy rain, drought, etc., and this summer may still be extremely hot. The onset date of regional extreme hot days nationwide is advancing at a rate of about 2.5 days per decade. This year, it occurred four days earlier than normal.

Due to climate change, atmospheric circulation has become more complex, increasing the frequency and intensity of extreme weather events. Globally, multiple disasters are overlapping to create compound events, such as high temperature with drought and low temperature with freezing, showing the characteristics of complexity, large-scale impact, and long-term consequences.

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Newsletter

TTP newsletters track and unpack the latest discussions on climate change in China, helping to identify new trends, gaps, and opportunities in climate communication

May 2024

碳价上涨

Price Up, Allowance Down, China’s Carbon Market Moves into High Gear

The dormant carbon market is becoming more active as the carbon price rises to historically high levels. Since the first quarter of this year, Chinese carbon prices have been rising steadily. After breaking through the 100 yuan per ton mark on 24 April, the national carbon market has maintained high prices throughout May. Several financial experts anticipate that carbon prices will continue to rise in the short term.

In this issue of May, TTP has gathered expert views on reasons behind the liveliness of carbon trading and more.

Click here for the the full newsletter.

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