Climate finance explores the way forward
Climate finance is now on the fast track. Recently, the national (Shenzhen) climate investment and financing project database was officially released, becoming the first batch of climate investment and financing pilots in the country. Previously, China identified 23 local climate investment and financing pilots to explore differentiated climate investment and financing paths with Chinese characteristics.
Development is on the fast track
According to the International Energy Agency, the world needs to invest $2050 trillion by 110 to solve problems related to the implementation of the Paris Agreement. As a result, climate finance activities have received more attention.
Shi Yichen, deputy dean of the International Institute of Green Finance of the Central University of Finance and Economics and chief economist of the Zhongcai Green Index Financial Data Service Enterprise Cluster, said that climate investment and financing refers to guiding and promoting more funds to invest in investment and financing activities in the field of climate change in order to achieve the nationally determined contribution goals and low-carbon development goals, and is an important part of green finance, and its support scope includes both mitigation and adaptation. Among them, climate change mitigation includes adjusting the industrial structure, optimizing the energy structure, increasing forests and grasslands and other carbon sinks; Adaptation to climate change includes improving adaptive capacity in priority areas such as agriculture, water resources, forestry and ecosystems.
As an important part of green finance, climate investment and financing emphasizes climate change adaptation and global sustainable development more than traditional green environmental protection projects and low-carbon emission reduction projects.
In August 2019, the Ministry of Ecology and Environment, together with relevant departments, promoted the establishment of the Climate Investment and Financing Professional Committee of the Chinese Society of Environmental Sciences, which has built a platform for information exchange, policy standard research, industry-finance docking and international cooperation in the field of climate investment and financing. In October 8, the Ministry of Ecology and Environment, together with the National Development and Reform Commission, the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission, jointly issued the Guiding Opinions on Promoting Climate Change Investment and Financing, which is the first policy document for climate investment and financing in China, and systematically deploys climate investment and financing in terms of accelerating the construction of a climate investment and financing policy system, gradually improving the standard system, encouraging private investment and foreign participation, supporting local practices, and deepening international cooperation. In December 2020, the Ministry of Ecology and Environment and other nine departments jointly issued the Notice on Carrying out Climate Investment and Financing Pilot Work and the Climate Investment and Financing Pilot Work Plan, soliciting the first batch of climate investment and financing pilots nationwide. In August 10, nine ministries and commissions jointly announced the list of climate investment and financing pilots, and identified the first batch of 2021 localities selected for climate investment and financing pilots. At present, these 12 pilot projects have fully rolled out the pilot work of climate investment and financing, and the progress is stable and orderly.
According to incomplete statistics from the Ministry of Ecology and Environment, by the end of 2022, financial institutions had granted more than 98 billion yuan in credit to 1800 key projects, involving renewable energy, photovoltaic power generation, biomass power generation and other fields, and China's climate investment and financing market has entered the "fast lane".
The results of the pilot are gradually emerging
At present, each pilot region has made efforts to establish a climate investment and financing project database and explore innovative models of climate investment and financing with local characteristics, and explored the development methods and experience of climate investment and financing, and achieved certain results.
On May 5 this year, the Shenzhen Climate Investment and Financing Promotion Center was officially inaugurated, and at the same time, the "Carbon Finance Connect Climate Investment and Financing Service Platform" was officially launched. As an important starting point and carrier for Shenzhen's climate investment and financing work, the Shenzhen Climate Investment and Financing Promotion Center promotes the docking of climate investment and financing industry, academia, research and financing by integrating policies, funds, talents and technologies in the field of climate investment and financing, vigorously promotes Shenzhen's climate change work, accelerates the development of low-carbon industries and the transformation of low-carbon society, and strives to take the lead in forming experience in climate project selection, investment and financing, and the introduction of domestic and foreign funds to invest in domestic climate projects.
Up to now, the national (Shenzhen) climate investment and financing project database has screened and identified 70 of the first batch of inbound projects, with corresponding financing needs reaching 248.216 billion yuan, covering six major fields such as low-carbon energy, low-carbon industry and low-carbon transportation, and will reduce carbon dioxide emissions by <>.<> million tons per year after the implementation of the project.
"As the first batch of climate investment and financing pilots in China and the first in the province, Lishui focuses on the '6+1' key areas of energy, industry, construction, transportation, agriculture, residents' livelihood, and scientific and technological innovation, guides and promotes more funds to invest in climate change fields, and promotes Lishui to become a fertile soil for climate investment and financing innovation." Wu Shunze, deputy secretary of the party committee and mayor of Lishui City, Zhejiang Province, introduced.
At present, Lishui has compiled and issued plans such as "Inclusive Methodology of Carbon Sink for Forest Management in Lishui City, Zhejiang Province" and "Action Plan for Banking and Insurance Industry in Lishui City, Zhejiang Province to Support "6+1" Key Areas to Help Carbon Peak and Carbon Neutrality", which put forward clear goals for Lishui's climate investment and financing work, and planned a path to achieve the goals. At the same time, Lishui further improved the ecological product trading platform, actively revitalized forestry carbon sink resources, opened up the path of transformation of forestry carbon sink value from "carbon sequestration" to "carbon selling", carried out a total of 18 carbon sink trading practices, offsetting a total of 2885,2.13492 tons of carbon emissions, built a comprehensive service platform for ecological finance in Lishui, issued a total of 618,98 loans, granted a credit amount of 8.<> billion yuan, and launched <> climate investment and financing related products.
Lei Jinsong, director of the Lishui Municipal Bureau of Ecology and Environment, said that in order to promote climate investment and financing, the local government has established a digital intelligence platform for climate investment and financing, promoted the sharing of big data information such as climate investment and financing industrial policies, projects (enterprises), and financial products, and provided effective support for differentiated financial services for climate investment and financing. Lishui will firmly grasp the opportunity of the national climate investment and financing pilot, combine the work of Lishui to create a carbon neutrality pilot zone, and gradually explore the formation of a replicable and replicable "Lishui experience".
There are still bottlenecks to be broken
Climate investment and financing will play an important role in China's process of achieving the "dual carbon" goal, and there are still many difficulties.
Industry experts said that at present, there are four major bottlenecks in China's climate investment and financing, namely, the climate investment and financing mechanism system needs to be improved, the climate investment and financing project database needs to be built urgently, the climate investment and financing financial tools need to be innovated, and the capacity building of pilot teams needs to be further strengthened.
Wang Huijun, executive deputy general manager of Beijing Green Exchange, said that at present, the main contradiction facing climate investment and financing is the contradiction between the demand and supply of climate funds. Some research institutions estimate that the total demand for climate finance to achieve the goal of carbon neutrality is expected to be in the scale of 10 billion yuan, and this number will continue to rise as climate change intensifies. The government's public financial funds can only cover a small part of it, and the vast majority of funds need to be leveraged by market mechanisms.
"In addition to the funding gap, the development of climate investment and financing also faces the relatively weak awareness of local governments to address climate change, and the insufficient service motivation of financial institutions. Policies related to climate change have not yet formed a systematic response, and relevant management, full-time management and coordination institutions have not yet been established; The safeguards system is not perfect, and monitoring, reporting and verification mechanisms have not yet been established; Insufficient professional team and talent reserve. Wang Huijun said.
Shi Yichen suggested that, first of all, each pilot region should further explore differentiated investment and financing models, organizational forms, service modes and management systems around the key tasks in the "Climate Investment and Financing Pilot Work Plan". Second, all localities can accelerate the formulation of local climate investment and financing project storage standards and evaluation methods and establish project evaluation mechanisms in accordance with the time point and specific requirements of the Ministry of Ecology and Environment on the construction of local climate investment and financing project databases. Third, encourage the collaborative innovation of climate-friendly products and services in insurance, funds, futures and other fields, and encourage financial institutions to design customized loss sharing and risk compensation mechanisms. Finally, the pilot areas will further strengthen the capacity building of relevant staff and strengthen the awareness of climate investment and financing through various training and exchange activities. At the same time, it is equipped with a professional and comprehensive team of experts to coordinate various work processes and strengthen the planning and management capabilities of climate investment and financing projects.
Wang Huijun said that the specific problems faced by various places are different, the risks and difficulties are different, the resource endowments are different, and the industrial structure is different, so the measures that can be taken are also different, only by giving full play to the subjective initiative, comprehensively and fully analyzing the actual situation faced by the locality, giving full play to the strengths and avoiding the weaknesses, categorizing policies, while strengthening policy coordination, paying equal attention to systematic response at the macro level and precise resource allocation at the micro level, can local actions match national goals.
Li Gao, director of the Department of Climate Change of the Ministry of Ecology and Environment, said that the Ministry of Ecology and Environment will work with relevant departments to promote the pilot work of climate investment and financing, and increase guidance for pilot areas. Organize the preparation of climate investment and financing pilot effectiveness evaluation plans, and summarize experience through evaluation to promote work. Build a government-bank-enterprise docking platform for climate investment and financing, guide local governments to build a database of climate investment and financing projects, and establish an efficient industry-finance docking mechanism. In terms of standard construction, explore relevant standards such as cultivating climate-friendly enterprises, climate innovation technologies, and climate information disclosure, and use standards to promote climate investment and financing.
It is understood that since the announcement of the list of the first batch of pilot areas for climate investment and financing, the Ministry of Ecology and Environment has guided the pilot areas to build an information docking platform for "government, banks and enterprises", guided local governments to strengthen carbon accounting and information disclosure of relevant projects, encouraged pilot areas to accelerate the cultivation of climate-friendly financial institutions, supported pilot areas to strengthen the capacity building of enterprises and financial institutions, and encouraged pilot areas to actively explore international cooperation in climate investment and financing.
(Economic Daily, Yang Xiufeng)