The bank will take climate change into account when implementing its monetary policy and regulatory role going forward and will encourage financial institutions to support green investments with a market-based approach.
According to Yi, the government will be able to cover a small portion of the trillion yuan in financing that he believes may be needed to meet China’s goal of peaking carbon emissions by now. 2030 and achieve carbon neutrality by 2060. There is therefore an urgent need to “establish appropriate public policy indicators to encourage market forces to fill the void”.
John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “China’s 14th Five-Year Plan set out a holistic approach to its energy transition, taking into account not only a reduction in fuel production. ‘carbon-intensive electricity, but also demand. in terms of management, energy efficiency and industrial and sector reforms. All of these initiatives will require financial capital. As Governor Yi Gang’s comment suggests, it will require mobilizing not only public sector funding, but also the private sector. In this regard, advances in China’s green finance taxonomy, including steps towards global convergence such as phasing out clean coal, as well as China’s leading role to the EU in the establishment of a common green taxonomy will greatly improve the ability of private green capital to be deployed. “
China will need to invest $ 6.4 trillion in new power generation capacity to meet its carbon neutral goal by 2060, according to a report by Wood Mackenzie.
It will take a 75% increase in electricity demand from the baseline scenario to replace fossil fuels for China to meet its goal of carbon neutrality, with nuclear playing a role and solar, wind and storage power. providing the primary energy solutions, he said.
In December, the central bank of China defined five measures for green finance in China.