Asia & the Pacific

Guangdong Province ranks first in economic output among China’s provinces and will play a major role in achieving China’s national climate-change goals. This paper examines the progress of Guangdong Province’s carbon dioxide emissions trading system (ETS) in reducing emissions; design features of the system; challenges it faces with regard to further development; and its relationship to China’s new national ETS.

In this report, we propose a market reform pathway for Yunnan that is both feasible and applicable to address some of these challenges immediately, while aiming for a standard design based on well-documented international experience. Our proposal includes at its heart a pay-for-performance monthly capacity auction that can help cover revenue deficiencies in the energy market. Building on international experience with capacity markets, this approach provides incentives for availability when generation is needed most and is compatible with the adoption of a single energy market for all electricity resources. Out-of-market payments to cover stranded costs of certain firms can thus be minimized. Finally, engaging consumers in both these energy and capacity markets can create high-powered incentives to shift consumption to low-cost months and hours, benefitting the entire province.

President-elect Joe Biden’s decision to create a new cabinet-level position for climate-related issues — and to choose so prominent a figure as former Secretary of State John Kerry to fill it — demonstrates Biden’s sincerity over putting climate at the very center of U.S. foreign policy. It is easy to understate the importance of this appointment, given the flurry of czars created by most new administrations.

Tongfi Kim and Andrew Taffer respond to Ketian Zhang’s summer 2019 article, “Cautious Bully: Reputation, Resolve, and Beijing's Use of Coercion in the South China Sea.”

Henry Kissinger warns that many existing domestic and international institutions that have helped govern the past decades will not survive the Covid-19 crisis. He is surely correct.

In the context of the South China Sea, China uses coercion primarily to maintain its reputation vis-à-vis other states, but remains aware of the potential costs of its actions.

In this report, the authors conduct a benchmarking analysis for energy and CO2 emissions intensity of the steel industry among the largest steel-producing countries.

For decades, Singapore has been a premier refinery hub and gatekeeper between Asia and the Middle East, but its position is increasingly threatened as producer countries are shifting into the downstream activities that helped make Singapore the “Houston of Asia”. Oil and petrochemicals drive about one quarter of Singapore’s net exports. Greater competition in the global oil and gas value chain could take a heavy toll on the city-state’s national budget and economic growth prospects.

Contrary to the conventional wisdom, China is a cautious bully that seeks to balance between the need to establish resolve and the economic cost of coercion, seen through its territorial disputes in the South China Sea.

Liberal market-oriented states are in a natural alliance to preserve and protect a global order that is systematically buttressing states’ embrace of market-oriented norms and values.