(Economic Watch) Global Race for Carbon Neutrality Why can green finance become a "good helper"?
Beijing, May 5 (ZXS) -- Since China officially proposed at the 29th session of the United Nations General Assembly in 2020 to strive to peak carbon dioxide emissions before 2030 and strive to achieve carbon neutrality before 2060, concepts such as carbon markets and green finance have attracted more attention around the world.
At a time when the world is racing for carbon neutrality, why can green finance become a "good helper"? At the 2023 Zhongguancun Forum held here, a number of industry experts conducted in-depth discussions on the dual carbon strategy and green finance.
At present, many financial institutions are actively taking action to accelerate the development of green finance. Huo Xuewen, Secretary of the Party Committee and Chairman of Bank of Beijing, said that green finance is an important strategic direction for the future development of economy and finance.
Huo Xuewen said that promoting the green and low-carbon transformation of the economy is inseparable from a large amount of financial support. Estimates show that China's realization of the "dual carbon" goal requires 10 billion yuan (RMB, the same below) of green and low-carbon investment, most of which needs to lead social capital in a market-oriented way. Green finance through investment and financing in the financial system can give play to the ability of financial resource allocation, 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 simply increasing the cost of fossil energy use to promote the transformation will bring great challenges to the whole society, and it is also necessary to rely on technological progress to reduce the cost of clean energy.
He went on to say that new energy is a manufacturing industry with economies of scale, and the larger the scale, the lower the unit cost. It can be seen that the cost of photovoltaic and wind power is rapidly declining with the increase of installed capacity. Therefore, in the current trend, to promote technological progress and reduce the cost of renewable energy, it is necessary to take full advantage of economies of scale, and the financial industry should also support the development of renewable energy.
The defined strategic objectives and complete policy support system will bring huge development opportunities to green finance. Chu Gang, chief operating officer of CICC, pointed out that according to relevant research results released by CICC last year, China's carbon neutrality in 2060 is expected to bring a cumulative investment demand of 139 trillion yuan.
CICC's research department latest estimates that China's green investment will reach 2022.2 trillion yuan in 6, and may increase by 5.16 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 People's Bank of China data, as of March this year, China's green loan balance exceeded 3 trillion yuan, accounting for about 22% of all loan balances, and the balance of green bonds also increased sharply to more than 10.2 trillion yuan, and the attractiveness and influence of China's green financial market to global capital continues to increase.
According to Kevin P. Gallagher, a professor at Boston University, policy banks can play a key role in decarbonization, and China can lead the way.
"China has the best electric vehicles, photovoltaics, and wind power in the world, and China can globalize these advantages through policy banks," Kevin Gallagher said, stressing that China has made low-carbon development a pivotal goal, and China's swift action can lead by example and point the way for policy banks in the rest of the world. (End)