Report: China requires innovative approaches to scale up climate finance

4 Feb, 2021 03:21
source: Singularity Financial

Singularity Financial Hong Kong February 4, 2021 – Climate Policy Initiative (CPI), an analysis and advisory organization with deep expertise in climate finance and policy, announces the release of “The Potential for Scaling Climate Finance in China,” CPI’s first report offering detailed insights into China’s green and climate financing trends across sectors, instruments, and financial actors, as well as outlining potential challenges and opportunities for mobilizing finance to meet China’s climate goals.

The report is endorsed by the team from the Beijing Institute of Finance and Sustainability (IFS), China’s independent proponent and think tank of green finance in the service of addressing climate change and sustainable development both within China and abroad.

As one of the world’s largest source of CO2 emissions, China’s climate action plays a vital role in whether the world can meet the Paris Agreement target of limiting warming to 1.5 degrees Celsius. In recent years, China has continued to reaffirm its climate commitments. It recently announced at the UN General Assembly that it will aim to achieve peak CO2 emissions before 2030, and carbon neutrality before 2060.

To meet the goals for advancing a sustainable ecological society, as well as fulfill its commitments to the world, China’s green and climate finance needs to be mobilized at an unprecedented scale. As such, The Potential for Scaling Climate Finance in China offers detailed findings on context, landscape, barriers, and opportunities of China’s climate finance, as well as practical recommendations for improving quality and scaling up innovative climate finance in China. For example, mobilizing social capital will be critical to achieving these goals.

As a world-renowned organization specializing in climate finance, CPI has a long history developing practical guidance on environmental policy and financial regulation that drives economic growth while addressing climate change. Meanwhile, IFS is dedicated to convening leading international finance experts and policymakers in China and partner countries to promote green finance by conducting policy research, toolkit innovation, capacity building and international collaboration in the field of green finance. Sharing the common belief that developing new financial policies, infrastructures and instruments are central to building strong and sustainable economies for future generations.

Ma Jun, director of the Beijing Institute of Finance and Sustainability (IFS), said, “IFS focuses on conducting research and offering advice on developing strategy, policies, and implementation of green finance, to not only help China reach its climate and ecological goals, but to continue building momentum for its international role in green finance and sustainable development. As such, we collaborate with other global leading organizations to help achieve our goals, and CPI is one such international climate finance expert. Regarding the current landscape of China’s domestic climate finance, he commented, “led by the central bank’s initiative, China has undertaken significant steps for sustainable finance reform in the past years. With the 14th Five-Year Plan being released in 2021, China will raise climate ambitions and work hard to implement innovative green finance.”

China’s green financial reform has made great progress during the 13th Five-Year Plan with high-level political support, central bank leadership, green taxonomies, and substantial incentives. So far, China’s green financial reform has led to more than RMB 11.55 trillion (USD 1.8 trillion) in outstanding green loans, RMB 1.2 trillion (USD 190 billion) in green bonds, hundreds of established green funds, opportunities for green stock indices, and insurance. In total, an average USD 202 billion was deployed annually in climate-related investments and an additional USD 118 billion in other environmental sectors during the period 2017-2018.

“We are very honored to be recognized by the Institute of Finance and Sustainability,” said Thomas Heller, chairman of the board and senior strategic advisor of CPI. “In the context of taking China’s green financial reform to the next stage, we are pleased to present this report, which for the first time offers detailed insights into China’s green and climate financing trends across sectors and financial actors.”

The full report, The Potential for Scaling Climate Finance in China, can be downloaded from CPI’s website.