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China is repositioning its coal fleet to provide system flexibility, with the entire existing fleet on track to be retrofitted by 2027. While technical capacity is increasing, the report argues that full flexibility is constrained by power market design and dispatch practices. It emphasizes that as coal retrofit potential plateaus, the rapid scale-up of clean flexibility, particularly battery energy storage, is essential to avoid locking in emissions beyond 2030 and to maintain grid stability as renewables become dominant.

China has rapidly expanded its flexible coal power capacity, exceeding its 2025 national target and positioning itself to meet a 2027 goal of retrofitting 500-700 GW. By the end of 2024, total flexible coal capacity exceeded 600 GW, with significant progress in provinces like Guangxi, Inner Mongolia, Shanxi, and Xinjiang. While coal utilisation is generally declining and showing greater seasonal variability due to renewable growth and demand peaks, the document notes that the full potential of this technical flexibility is not yet reflected in system operations due to market design and institutional arrangements. The transition is supported by a capacity pricing mechanism and diversified revenue models, though flexible operation increases costs through higher maintenance, reduced fuel efficiency at low loads, and accelerated depreciation.

The report details a field visit to the Changjiang River Scientific Research Institute (CRSRI) and the Zhanghe Irrigation District in China. It highlights the use of a 'digital twin' system for water management, community-led irrigation through Farmers' Water Users' Associations, and research at the Hubei Provincial Irrigation Experiment Station. The visit aimed to strengthen cooperation between China, Thailand, and other Lancang-Mekong countries to implement climate-resilient agricultural practices.

The document finds that while China has seen record clean energy installations and a decline in coal-fired power generation, government permitting for new coal plants and investments in blast furnace capacity accelerated in early 2022. This trend creates a risk of significant stranded assets—estimated at $8.5 billion for power and $15-22 billion for steel—and complicates the economic and political transition to low-carbon energy. The report highlights that power shortages in provinces like Sichuan were driven by rigid grid management and high fuel prices rather than a lack of capacity, and recommends reforming grid operations and including the steel sector in the emissions trading system.

The report analyzes the 2021 Chinese green bond market, which saw a sharp rebound with USD 109.4bn in total issuance. It highlights the role of top-down policy guidance, such as the Green Bond Endorsed Project Catalogue (2021 Edition), in standardizing the market and aligning it with international principles. The analysis finds a positive correlation between local policy efficacy scores and the volume of green bond issuance, particularly in economically developed regions like the Yangtze and Pearl River Deltas. However, stakeholders identify challenges including inadequate information disclosure and a lack of issuer experience in identifying green assets. The report recommends strengthening disclosure standards, developing transition finance frameworks, and expanding innovative products like sustainability-linked bonds to support high-emitting sectors.

In 2021, China's coal-fired power construction reached its highest level since 2016, with 33 GW of new capacity starting construction. Despite carbon neutrality targets, investment in long-process steel remains high, with China accounting for 85% of global new long-process capacity. The report warns that these investments lock in coal dependency and risk creating stranded assets valued at hundreds of billions of dollars. While there is growth in electric arc furnace (EAF) steel and renewable energy targets, the scale of new fossil-fuel infrastructure continues to outpace the transition needed to meet Paris Agreement goals.

Despite pledges for carbon neutrality, China's power and steel sectors continued to announce coal-based projects in early 2021. While CO2 emissions growth showed signs of cooling in the second quarter of 2021 due to government controls on financial excesses and industrial output, the volume of new coal projects remains high, risking the creation of stranded assets and undermining 2030 emission reduction targets.

Despite a slowdown in emission growth in Q2 2021, China's power and steel sectors continued to announce significant new coal-based capacity in the first half of the year. The report highlights a contradiction between economic growth driven by construction and decarbonization goals, noting that zero-emission power only met 30% of electricity demand growth between H1 2019 and H1 2021. While government measures to control fiscal overspending and industrial output led to a slowdown in CO2 emission growth in the second quarter, the continued announcement of coal-based projects risks creating stranded assets and hindering the transition to low-carbon technologies.

The report finds that while most legal ivory stores complied with the phased shutdown of the domestic market, illegal trade persists through physical outlets, websites, and social media. Physical illegal markets have seen a decline in the average number of items per outlet since 2007, but trade has shifted toward second-tier cities and encrypted social media platforms. Prices in illegal markets remain significantly lower than in legal markets, and there is a noted lack of clear government policy regarding the management of unsold ivory stockpiles following the ban.

Between 2012 and 2013, 367 new species were discovered in the Greater Mekong region, including 290 plants, 24 fish, 21 amphibians, 28 reptiles, 1 bird, and 3 mammals. The report details specific discoveries such as the Cambodian Tailorbird, the Laotian giant flying squirrel, and the eyeless huntsman spider. It argues that the region is one of the five most threatened biodiversity hotspots globally, facing pressures from unsustainable infrastructure, extractive activities, agricultural expansion, and an illicit wildlife trade valued at at least 16 billion US dollars annually. Between 1973 and 2009, the region lost 42.4 million hectares of forest, or 30 per cent of its cover. WWF advocates for a transition to a green economy and regional collaboration, such as the Core Environment Program-Biodiversity Conservation Corridors Initiative (CEP-BCI), to safeguard natural capital and ensure the well-being of over 70 million people.

The report assesses the tension between economic growth through trade facilitation and the preservation of biodiversity in the Greater Mekong Subregion (GMS). It argues that while measures to ease the movement of goods and people—such as those proposed by the WTO, ASEAN, and the GMS Cross Border Transport Agreement—can stimulate economic development, they also risk exacerbating the illegal trade in wildlife and timber by providing easier transit routes for smugglers. The author highlights that current conservation efforts are often fragmented by national borders, whereas the ecoregions they protect are transboundary. The report recommends that GMS states rationalize conservation measures, strengthen penal laws, and coordinate customs intelligence to mitigate the risks posed by trade facilitation.

The report analyzes China's biofuels sector, focusing on the transition from grain-based ethanol to non-grain feedstocks grown on marginal land. It finds that government subsidies, including direct payments and tax exemptions, are essential for the industry's viability but may undermine food security, increase food prices, and cause environmental degradation. The authors conclude that biofuels have a negligible impact on China's energy security and recommend eliminating direct production subsidies.

The report analyzes China's energy system, which was heavily coal-dependent in 1990, and projects environmental loadings up to 2020. It compares a Business-As-Usual (BAU) scenario with two enhanced environmental scenarios, demonstrating that while BAU leads to significant increases in SO2 and CO2 emissions, targeted policy interventions in energy mix, efficiency, and clean coal technology can mitigate these impacts. The study recommends shifting toward hydropower, nuclear power, and natural gas, alongside the implementation of pollution levies and integrated planning to achieve sustainable development.

SUMERNET PLUS is a transboundary programme running from July 2025 to December 2029, funded by 54 million SEK from the Swedish Government. It aims to link evidence-based research with policymakers and marginalized groups to improve climate resilience in the Mekong Region. The programme focuses on three key themes: nexus interactions and trade-offs among sectors like water and energy, building socio-ecological resilience, and supporting just sustainable transitions. To achieve these goals, it will provide 34 grants ranging from SEK 150,000 to 2,000,000, conduct capacity building for various stakeholders, and facilitate policy dialogues at regional forums such as the Mekong River Commission and ASEAN.

The project established a demonstration area in Guilin, China, to test climate-smart water technologies against traditional flooding irrigation. By implementing a "thin, shallow, wet, and dry" irrigation mode supported by intelligent monitoring and control devices, the project reduced irrigation water quotas from 390mm/mu to 351mm/mu while increasing late rice yields from 418kg/mu to 437kg/mu. Key technologies deployed include intelligent water level gauges, soil moisture monitors, and integrated gates for measurement and control to enable precise water resource management under climate change.