What can green finance do to help carbon neutrality?

(Economic Watch) What can green finance do to help carbon neutrality?

　　China News Agency, Beijing, April 17 (Liu Wenwen) "Carbon neutrality is a paradigm change. China has only 30 years to go from carbon peak to carbon neutrality, which means that carbon neutrality will bring about dramatic changes in the entire economic structure. Profound changes. In this process, finance will play a key role." Zhu Min, dean of the National Institute of Financial Research of Tsinghua University and former vice president of the International Monetary Fund, said at Tsinghua University on the 16th.

　　It has been more than a year since China explicitly proposed the carbon neutrality target of peaking in September 2020.

For more than a year, the call for carbon neutrality has been increasing. However, how should green finance play a role in the transition to carbon neutrality?

　　At the 2022 Tsinghua PBCSF Global Financial Forum held on the same day, a number of experts conducted in-depth discussions on the development of green finance under the "dual carbon" goal.

　　Zhu Min analyzed that, incrementally, finance provides zero-carbon financial financing with huge scale, long term and high risk for carbon neutrality.

"Energy financing is estimated to be 185 trillion yuan, which is quite a large investment."

　　The incremental investment is huge, but the challenge of the stock is also huge.

Zhu Min went on to say that asset prices will be redefined during the transition to carbon neutrality, and the balance sheets of countries, industries, companies, financial institutions, and residents will all change accordingly.

It is a big deal for China to experience asset price reshaping with such a huge asset scale.

In this process, managing the financial risks of the transition to carbon neutrality is particularly important.

　　To achieve the dual carbon goal, it is necessary to establish an efficient green financial investment and financing system to help the optimal allocation of resources.

According to Zhang Xiaoyan, associate dean of the PBC School of Finance of Tsinghua University and chair professor of finance, green credit is the largest green financial product in the current green financial market.

Considering that green credit currently accounts for a relatively small amount of total loans, China has huge room to move forward.

　　As Zou Ji, CEO of the Energy Foundation and President of China, said, tackling climate change and protecting the environment is already an important factor in supporting economic growth.

It is foreseeable that green finance will play an important role in it.

That being the case, how can green finance help achieve carbon neutrality, and what are the important aspects that need to be paid attention to?

　　According to Tan Congyan, Vice President of China Securities Finance Research Institute, an important point in the development of green finance is where the money comes from. This requires the market to fully play its role. The key is the disclosure of relevant information, because only by understanding and mastering it Market information can make investment decisions.

　　"Information disclosure is an important basis for the market mechanism to play an effective role, and it is also an important criterion for investors to clearly identify relevant risks, benefits and costs." In addition, Tan Congyan also said that information disclosure is also an important starting point for supervision. The first is to enhance market transparency and promote market development.

The second is an important means of maintaining market discipline.

Generally speaking, information disclosure is an important aspect to solve market information asymmetry.

　　He Ping, deputy dean of the School of Economics and Management of Tsinghua University and professor of the Department of Finance, believes that it is very important to discuss whether to establish a relationship between carbon sinks and carbon emission rights.

　　He Ping analyzed that in order to achieve market-oriented green finance, a unified carbon market needs to be established, all carbon-related things need to be priced uniformly, and all benefits from emission reductions must be directly reflected in financing costs.

Considering that carbon sequestration can be incentivized while reducing emission relationship between powers.

　　Wang Xin, director of the Research Bureau of the People's Bank of China, mentioned that the concept of green finance that everyone mentioned is relatively broad, but with the proposal of the "dual carbon" goal, it is necessary to subdivide which ones are aimed at reducing carbon.

For example, clean coal is indeed beneficial to environmental protection but not conducive to carbon reduction.

It is necessary to become more and more refined, and distinguish between carbon reduction and ecological environment protection, which is also conducive to better formulation of relevant policies.

　　"The entire carbon neutrality is actually a fundamentally subversive reconstruction of China's future economic development model and economic structure, the entire economy from high carbon to low carbon, and the entire manufacturing industry is reshaped through energy revolution and economic innovation. And in this process , to build a financial macro-management framework, build a zero-carbon financial risk management system, and at the same time financial institutions themselves must achieve zero-carbonization." Zhu Min said.

(Finish)