China opened the world’s largest carbon-trading market (SCMP) today after originally pledging to do so ahead of the 2015 signing of the Paris Agreement on climate change. The market is limited to the country’s energy sector, which is responsible for some 40 percent of China’s carbon emissions (FT) and 15 percent of global emissions. 

Rather than set a cap on total emissions from the sector, as carbon markets in the European Union and Canada do, China issued free allowances to companies based on previous years’ performances. There will likely be stricter caps in the future, but their scope has yet to be determined (WSJ). Officials have suggested that the cement, aluminum, and steel sectors will be added to the program next year. In the first transaction on China’s exchange, a ton of carbon was priced at around $8, compared to the $59–$70 prices in the European system. Beijing says its exchange will help the country reach peak carbon emissions by 2030 and carbon neutrality by 2060.

New Zealand Prime Minister Jacinda Ardern convened an informal virtual meeting of the Asia-Pacific Economic Cooperation (APEC) today to discuss the region’s economic recovery from the coronavirus pandemic. Both U.S. President Joe Biden and Chinese President Xi Jinping will address (Bloomberg) the group. Biden will share a vision for a “free and open Indo-Pacific,” the White House said.
 
CFR’s James M. Lindsay and Steven A. Cook preview the APEC meeting on this episode of The World Next Week.

The situation in Afghanistan dominated the agenda (AP) during a two-day international conference in Uzbekistan that was originally intended to focus on regional trade and connectivity. Pakistani Prime Minister Imran Khan said Pakistan will join Iran, Tajikistan, Turkey, and Uzbekistan in trying to facilitate (Dawn) an Afghan peace process.
 
India: A heat-tolerant COVID-19 vaccine developed by the Indian Institute of Science produced antibodies that neutralize all variants of concern (TNN) of SARS-CoV-2, the virus that causes COVID-19, according to the peer-reviewed findings of a study conducted in animals. The vaccine formula was shown to remain stable at 37°C for up to a month.

Lebanese Prime Minister–designate Saad Hariri resigned (Al Jazeera) after failing to reach an agreement with President Michel Aoun over the makeup of a government after months of deadlock. Hariri’s supporters demonstrated in the streets of Beirut after his resignation was announced.
 
Syria: A rocket attack by government forces killed at least nine civilians (AP) in the northwestern Idlib Governorate, Syria’s last rebel enclave, according to rescue workers and a war monitor.

The China-based Asian Infrastructure Investment Bank (AIIB) approved a $100 million loan (Reuters) to Rwanda to finance COVID-19 recovery measures. The World Bank will cofinance the loan, which is the AIIB’s first to sub-Saharan Africa.
 
South Africa: President Cyril Ramaphosa will today visit KwaZulu-Natal Province (AFP), the epicenter of days of unrest in which at least 117 have been killed. South Africa’s government deployed twenty-five thousand troops in response to protests and looting.
 
For the Africa in Transition blog, CFR’s John Campbell discusses the unrest, South Africa’s largest urban riots since the end of apartheid.

Despite warnings issued (Politico) by the European Flood Awareness System, extreme flooding caused by record rainfall (BBC) in Belgium and Germany has killed more than one hundred people.
 
Brussels: The EU’s top court reaffirmed a 2017 ruling that said private employers can ban people from wearing religious symbols (Guardian), including headscarves.

A nine-year study of four sites in Brazil’s Amazon Rainforest found that those areas emitted more carbon (CNN) than they absorbed, apparently due to climate change and deforestation. The Amazon has historically played a vital role in regulating the Earth’s climate by acting as a carbon sink.
 
Cuba: Commenting on Cuba’s anti-government protests, President Biden said the United States will not restore permission for remittances (Reuters) to the island that ended under President Donald Trump. He also said the United States would consider sending COVID-19 vaccines to Cuba if an international organization administered them.
 
This Backgrounder looks at U.S.-Cuba relations.

The first monthly payments of an expanded child tax credit that was included in the country’s COVID-19 recovery package have been sent to families (AP). Biden has said the payments will average $423 per family. Families who do not make enough money to owe income taxes were previously ineligible for such credits but will now receive the payments.