This week we focus on covering a series of impactful initiatives, including optimizing carbon emission trading, integrating green standards into government procurement, and closely monitoring climate change. Innovative financial products and unmanned driving technology are also being developed to support green growth.

The Stark Reality of Climate Change

On July 4, the China Meteorological Administration released the "China Climate Change Blue Book (2024)," detailing the climate change situation in 2023 for China and the world. Source here.

  • The data indicates that 2023 was the warmest year on record globally, with frequent extreme weather events. China's average temperature also hit a historical high since the beginning of complete meteorological records.
  • The Blue Book shows a continuing trend of global warming, with record highs in global average temperatures, ocean heat content, and sea level heights, and a new low in Antarctic sea ice extent.
  • China, as a significant area affected by climate change, saw record levels in average annual temperature, the retreat distance of the Urumqi Glacier No. 1, and the active layer thickness of permafrost along the Qinghai-Tibet Highway.

Given the severe reality of climate change, I believe every country and individual must take it seriously and act proactively. Reducing carbon emissions and protecting the environment is a collective responsibility.

Optimization of Carbon Emission Trading Scheme

On July 2, the Ministry of Ecology and Environment released a notice to solicit public opinions on the "2023-2024 National Carbon Emission Trading Scheme for the Power Generation Industry Quota and Distribution Plan (Draft)." Source here.

  • This draft bases its quota calculations on the 2023 balanced values of various power units, taking into full consideration technological advancements and the economic resilience of enterprises.
  • The draft aims to adjust the benchmark values of different power units to accurately reflect the actual carbon emissions levels of the industry.
  • The drafting committee explained that the allocation parameters are optimized by shifting from supply-based to generation-based quota determination. This change simplifies the procedure and enhances accuracy.
  • The draft also removes the heating correction factor from the quota calculation formula, instead using adjusted benchmark values to incentivize cogeneration units reasonably. Such changes represent a move towards more scientifically robust and practically operable standards.

Green Standards in Government Procurement

On July 4, the General Office of the State Council issued the "Three-Year Action Plan (2024-2026) for Rectifying Market Order, Building Regulatory Systems, and Promoting Industrial Development in Government Procurement." Source here.

  • The plan proposes integrating carbon footprint management into government procurement standards to expand green procurement. Specific measures include revising procurement standards for packaging materials, encouraging the use of eco-friendly packaging, and developing green procurement standards for municipal infrastructure, electronics, and new energy vehicles.
  • This initiative not only aims to reduce carbon emissions in government procurement processes but also sets a precedent for the entire society to shift towards green consumption.

As the largest purchaser, the government's adjustment of procurement standards has a substantial market influence. I believe this will motivate more enterprises to consider carbon footprint issues in their product design and manufacturing processes, fostering a broader societal shift towards sustainability.

Innovative Green Financial Products

Recently, the first natural beneficiary commercial ESG-linked loan in China was issued in Inner Mongolia.

This loan, provided by the Inner Mongolia branch of the Bank of China to Inner Mongolia Shengmu Hi-Tech Dairy Co., Ltd., amounts to 100 million yuan and is intended for desertification control, ecological restoration, green production, and biodiversity protection. Source here.

Additionally, Shenzhen has launched the "Carbon Reduction Loan" product, linking loan interest rates with corporate carbon reduction performance to incentivize energy conservation and emission reduction. Source here.

Microalgae Ecological Carbon Sequestration System

On July 4, the government of Hulunbuir, Inner Mongolia, announced the completion of the foundational infrastructure for the "Biological Carbon Sequestration and Soil Structure Reconstruction Technology Research Demonstration" project at the Baorixile open-pit coal mine. Source here.

  • This project marks China's first microalgae ecological carbon sequestration system in a mining area.
  • Microalgae, among the earliest life forms on Earth, have a carbon sequestration efficiency 10 to 50 times higher than terrestrial plants. Each ton of biomass produced by microalgae can sequester 1.8 tons of CO2, making it a vital carbon reduction technology.
  • The project includes the construction of a low-carbon resource utilization laboratory for agricultural and pastoral waste, a 1600-square-meter microalgae carbon sequestration greenhouse, three 50-ton raceway ponds, four 1-ton photobioreactors, and the production of 200 tons of high-humus nutrient soil.

Overall, these multifaceted strategies in green development and climate change mitigation—from policy formulation and technological innovation to financial support—offer valuable insights and experience for global green development.

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