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  • Ernie Diaz

How Green Was My Rally

3.5 trillion RMB. That's a low estimate of the investment China needs to reach carbon neutrality by 2060. The government can't just print that up; we're talking RuMBas, not petro-dollars. 

So the green future allocation will be financialized. Make that green futures. The new Guangzhou Futures Exchange (thank you, Mr. Deng) will be offering carbon futures products. The imminent National Carbon Market has reached a "critical stage", with over 2,000 power company participants' having completed account data review, and turnover predicted to quickly reach $1b. Even speedy delivery masters SF Express are offering carbon neutrality bonds, with a 3.79% coupon.

"The carbon neutrality industry serves a very obvious ulterior motive," says Edward Lehman, "providing a push up the value chain for China's manufacturing, services, and even financial sector. Keep in mind that carbon futures on the Guangzhou Futures Exchange will be priced in foreign currencies as well as RMB, and open to qualified foreign institutional investors. That exchange will be dynamic, to say the least, but a host of more stable green financial products are on the horizon."

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