In a landmark decision, China's first energy law was approved in early November during the 12th session of the Standing Committee of the 14th National People’s Congress, set to take effect on January 1, 2025. This comprehensive legislation encompasses vital areas such as energy planning, market systems, technology innovation, and legal accountability, marking a significant step forward for the world's largest energy producer and consumer.

The introduction of this law comes at a crucial time, coinciding with the ongoing 29th Conference of the Parties (COP29) to the UN Framework Convention on Climate Change in Baku, Azerbaijan. With global temperatures on the rise—2024 is anticipated to be the hottest year on record—the urgency for substantial climate action has never been more pressing. The EU climate monitor, Copernicus, recently highlighted that global warming has already surpassed 1.5 degrees Celsius above pre-industrial levels, making adherence to the Paris Agreement more critical than ever.

At the recent COP28 held in Dubai, a historic consensus was reached among 198 nations to transition from fossil fuels, which for the first time explicitly recognized the necessity to phase down all fossil energy sources—coal, oil, and gas. Achieving these commitments requires a strategic, just transition, especially for developing countries, while also addressing the pressing need for deep emissions reductions.

China is already making strides towards its ambitious goals: peaking carbon emissions before 2030 and reaching carbon neutrality by 2060, as outlined in the 14th Five-Year Plan (2021-2025). This commitment is particularly remarkable when compared to the longer timelines set by the United States and the European Union, who aim for carbon neutrality by 2050—a process taking the US approximately 45 years and the EU around 60 years. China's fast-tracked plan for a 30-year transition highlights its determination to lead in the clean energy sector.

Over the past five years, China has outspent the US and Europe on clean energy by a staggering margin, leading the manufacturing of renewable technologies. Approximately 90% of the world’s solar panels, over 70% of lithium batteries, and 65% of wind turbines are manufactured in China, showcasing its dominance in the clean energy race.

Meanwhile, Hong Kong is positioning itself as a crucial hub for green finance within China’s overarching climate strategy. Siddharth Chatterjee, the UN’s resident coordinator in China, underscored Hong Kong’s potential at the Hong Kong Financial Forum 2023, emphasizing the city’s role in financing environmentally friendly projects necessary for China's low-carbon economy transition.

The Hong Kong Special Administrative Region aims for carbon neutrality by 2050, with interim targets of reducing carbon emissions by 50% from 2005 levels by 2035. The government’s Climate Action Plan 2050 outlines strategies for net-zero electricity, energy savings, green transport, and waste reduction, aligning closely with national goals.

As interest in green finance surges, Hong Kong stands to benefit not just economically but also environmentally. The green bond market, for instance, has surpassed $1 trillion in issuances globally since its inception. With increasing oversubscription rates, investments in sustainable projects offer not only profitability but also align with broader climate objectives.

Both Hong Kong and the Greater Bay Area are set to play pivotal roles in achieving the targets established at COP28. The transition to a low-carbon economy presents immense economic opportunities, particularly in sectors such as green tech and blue finance, which focuses on the sustainable use of ocean resources.

In conclusion, as China gears up for a future that prioritizes sustainability, the new energy law represents a significant tool to meet its carbon neutrality goals. Hong Kong's aspirations to become a green finance leader align perfectly with this vision, indicating that the future of both the mainland and the SAR will not only be greener but also filled with innovative economic prospects. The journey toward a sustainable future is underway, and both regions are making strides that could inspire global efforts against climate change.