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At present, the world is facing severe challenges in response to climate change and sustainable energy development. In 2017, the concentration of greenhouse gases in the atmosphere was at its highest level in the past 800 thousand years. The global average temperature has risen by 1.1°C over the past 160 years, and the economic losses due to climate-related disasters have reached 320 billion USD. Coping with such challenges requires a global, systematic, operational and measurable technical solution. In addition, the production and consumption of fossil energy seriously exceed the global capacity of resources, environment and climate. The main reason for the dilemma of both climate and energy development is the dominance of fossil energy in the current energy system. Therefore, the fundamental solution is to achieve coordinated climate-energy governance. The key is to implement Clean Replacement on the energy production side and Electricity Replacement on the energy consumption side. To achieve this, a platform needs to be constructed for large-scale exploitation, allocation and utilization of clean energy resources at a global level, to form a modern, clean energy-dominant, electric-centered and interconnected energy system, and get rid of the dependence on fossil energy.

Market-based strategy is the most efficient way for climate and energy resource allocation. An increasing number of countries are actively developing electricity market and carbon market. The two markets are showing a trend of coupling development with mutual influences in many ways. However, they are still operating independently with no coordinated management due to historical reasons, which leads to a series of problems such as lack of systematic emission reduction mechanisms, duplicated market functions, high management costs and limited emission coverage.

The Global Energy Interconnection Development and Cooperation Organization (GEIDCO) has conducted in-depth research and analysis on the global electricity market and carbon market, and firstly proposed a concept of Global Electricity- Carbon Market applying the strategy of coordinated climate-energy governance. The meaning of the concept is to promote a deep integration and coordinated development of electricity market and carbon market, planning global clean energy transition and carbon emission reduction simultaneously through market mechanism. Based on this, Clean Replacement and Electricity Replacement can be specified into implementable and verifiable tasks. Therefore, dynamic changes in Electricity-Carbon price will ensure clean energy power generation has a competitive advantage over fossil energy power generation. Moreover, cross-border and inter-continental Electricity- Carbon trading will promote large-scale exploitation, wide-range allocation and high penetration of clean energy worldwide. The Global Electricity-Carbon Market can integrate mechanisms and participants of both energy and carbon markets to achieve efficient coordination of goals, paths and resources. It also provides scientific plans and paths for emission reduction, increases market efficiency, effectively stimulates the entire society to reduce emissions, and builds a platform for international win- win cooperation. The market will be a replicable, verifiable and statistical systematic solution to climate change and sustainable energy development.

This report studies the overall design, development priorities, development paths and benefits of the Global Electricity-Carbon Market (GE-CM). The report consists of five chapters. Chapter 1 introduces the situation of climate change and energy transition, analyzes the necessity and significance, and proposes the basic concept of a Global Electricity-Carbon Market. Chapter 2 proposes the overall plan of the Global Electricity-Carbon Market, presents the functional objectives, market structure, participants, trading products and key mechanisms of the market, and analyzes the relationship between the Global Electricity-Carbon Market and the Global Energy Interconnection (GEI). Chapter 3 analyzes the priorities during the construction of the National, Regional/ Sub-regional and Global Electricity-Carbon Markets, from the perspectives of clean energy development, grid interconnection and market construction. Chapter 4 proposes the development path of the Global Electricity-Carbon Market with the stage goals by 2025, 2035 and 2050. Chapter 5 analyzes the diversified benefits and values of Global Electricity-Carbon Market in delivering benefits in economy, accelerating clean energy transition, ensuring safe and efficient energy supply, and addressing climate change and environmental pollution issues.

The Global Electricity-Carbon Market is of great significance to the implementation of the Paris Agreement and the realization of the United Nation (UN) Sustainable Development Goals (SDGs). It is a major theoretical innovation that benefits both the present and the future and serves the common interests of all mankind. Building the Global Electricity-Carbon Market requires active participation of governments, international organizations, social institutions and industrial enterprises. GEIDCO is calling on all parties to work together, strengthening cooperation, promoting research and market development related to the Global Electricity-Carbon Market, and making contributions to the implementation of the Paris Agreement and the realization of the UN SDGs for a better future.