The expansion of For developing countries, adapting to climate change becomes more urgent

Xie Zhenhua, Former Special Envoy for Climate Change Affairs of China

The global average near-surface temperature in 2023 was 1.45°C above the pre-industrial baseline, making it unlikely to limit warming to within 1.5°C by 2030. As the challenge to achieve the 1.5°C goal in time grows more complex, the issue of adaptation has become crucial, as it directly impacts lives. 

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China is willing to share its technologies and practices in industrial decarbonization, electrification, smart technologies, and low-carbon smart city demonstration projects with other nations, working together toward a greener future. 

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The expansion of China’s national carbon market will increase market activity and promote industry transition

Shi Yichen, Assistant Dean of International Institute of Green Finance, Central University of Finance and Economics 

Compared to other high-emission sectors, the cement, steel, and aluminum electrolysis industries are particularly well-positioned to participate in the national carbon market. They have demonstrated a sense of urgency in cutting emissions, the potential to coordinate pollution control and carbon reduction, robustness in data quality, and cost-effectiveness in marginal emission reductions. 

The first round of expansion will bring in approximately 1,500 new key emitters, which is expected to result in an increase in carbon prices and the vitality of the carbon market. The growing heterogeneity within the industry will also help to diversify the market’s risk appetite, leading to a more rational carbon pricing structure. This will enhance the market’s ability for carbon price discovery and better reflect the varying costs of emission reductions across different entities. Moreover, the expansion will reduce the export burden posed by carbon tariffs in the industry. 

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