(Economic Observer) How does the global competition for carbon neutrality and green finance become a “good helper”?
China News Agency, Beijing, May 29 (Reporter Liu Wenwen) Since China officially proposed at the 75th United Nations General Assembly in 2020 that it will strive to peak carbon dioxide emissions by 2030 and strive to achieve carbon neutrality by 2060. Concepts such as markets and green finance have drawn more attention around the world.
In the current global competition for carbon neutrality, how can green finance become a “good helper”? At the 2023 Zhongguancun Forum held here, many industry experts conducted in-depth discussions on the dual-carbon strategy and green finance.
At present, many financial institutions are actively taking actions to accelerate the development of green finance. Huo Xuewen, Secretary of the Party Committee and Chairman of the Bank of Beijing, said that green finance is an important strategic direction for the future economic and financial development.
Huo Xuewen said that the promotion of economic green and low-carbon transformation is inseparable from a large amount of financial support. Estimates show that China’s realization of the “dual carbon” goal requires green and low-carbon investment of tens of billions of yuan (RMB, the same below), most of which need to lead social capital in a market-oriented manner. Realizing green finance through investment and financing in the financial system can play a role in the allocation of financial resources and guide funds to gradually withdraw from high-carbon industries and flow to dual-carbon projects.
Peng Wensheng, Chief Economist of CICC, pointed out that the global energy crisis has made us realize that only relying on increasing the cost of fossil energy to promote transformation will bring great challenges to the entire society, and that we must rely on technological progress to reduce the use of clean energy cost.
He went on to say that new energy is a manufacturing industry, which has economies of scale. The larger the scale, the lower the unit cost. It can be seen that the cost of photovoltaics and wind power is declining rapidly with the increase of installed capacity. Therefore, in the current trend, to promote technological progress and reduce the cost of renewable energy, we must make full use of the economies of scale effect, and the financial industry must also support the development of renewable energy.
Definite strategic goals and a complete policy support system will bring huge opportunities for the development of green finance. Chu Gang, chief operating officer of CICC, pointed out that according to relevant research results released by CICC last year, China’s realization of carbon neutrality in 2060 is expected to bring a cumulative investment demand of 139 trillion yuan.
According to the latest estimates from the Research Department of CICC, China’s green investment will reach 2.6 trillion yuan in 2022, and the cumulative increase may be 16.3 trillion yuan in the next five years. “Green economy has become one of the important engines of China’s economic recovery, and an important driving force for promoting and leading high-quality economic development.” Chu Gang said.
Today, China has achieved positive results in financial support for carbon emission reduction and carbon neutrality. According to the data of the People’s Bank of China, as of March this year, China’s green loan balance exceeded 22 trillion yuan, accounting for about 10% of all loan balances, and the balance of green bonds also increased significantly to more than 2.5 trillion yuan. The attractiveness and influence of capital continue to increase.
According to Boston University professor Kevin P. Gallagher (Kevin P. Gallagher), policy banks can play a key role in decarbonization, and China can lead the way in this regard.
“China has the world‘s best electric vehicles, photovoltaic power generation, and wind power generation. China can globalize these advantages through policy banks.” Kevin Gallagher also emphasized that China has made low-carbon development a pivotal goal , China’s swift action can serve as a model, pointing the way for policy banks in other countries around the world. (over)