China Energy Outlook 2020 - Flipbook - Page 68
Green Financing
Since 2016, China has experienced rapid development of green financing policy - including
green bonds, green lending, green development funds, green insurance, and markets for
pollution control rights – and is now a leader internationally in this area despite some
questions regarding its broad definition of “green”.
Since 2016, China has established, arguably, the most coordinated and comprehensive green
financing policy framework in the world (IPEEC, 2016; Columbia University, 2019). Green
financing is defined by China as “financial services provided for economic activities that are
supportive of environmental improvement, climate change mitigation, and more efficient
resource utilization” (Columbia University, 2019).
To support the development of green financing, China’s various ministries and commissions
have issued a series of policy guidelines related to green bonds, green lending, green
development funds, green insurance, markets for pollution control rights, local government
initiatives, and international cooperation (CBRC, 2015; Columbia University, 2019; CSRC, 2017;
Dai et al., 2016; GCF, 2018; IFC, 2012; Jiang et al., 2018; PBOC, 2015a; PBOC, 2015b; PBOC,
2016; Peng et al., 2018; Wang, 2018). In addition, in 2017 China’s State Council established
Green Finance Reform and Innovation Pilot Areas in Zhejiang, Jiangxi, Guangdong, Guizhou, and
Xinjiang to explore green finance reform and innovation and to develop replicable solutions to
scale up green finance nationally (Paulson Institute, 2019; Wang et al., 2017).
China’s green credit and green bond issuances have risen steeply in recent years. In 2018,
China’s green loan balance reached RMB 8 trillion, an increase of 16% against the previous year.
China also issued 283 billion RMB in green bonds, making it the second largest national green
bond issuer in 2018, behind only the United States (Columbia University, 2019). And while
controversies exist with regard to China’s broad definition of “green,” (i.e., clean coal), the
country offers a clear blueprint for greening a national financial system from the top-down.
Through its leadership at the 2016 G20 Summit, and support for the 2016 G20 Leaders
Communiqué, China is also responsible for building consensus within the international
community to jointly promote the development of green finance globally to advance
environmentally sustainable economic growth (UNEP, 2016; Wang et al., 2017; Chong, 2019).
Winning the Battle for a Blue Sky
The air pollution reduction targets set out in China’s Winning the Battle for a Blue Sky
program have either been met or are on track to be achieved by 2020 in the Beijing-TianjinHebei and surrounding areas, the Yangtze River Delta, and the Fen River and Wei River Plains.
In an effort to significantly reduce the total amount of air pollutants, support the reduction of
greenhouse gas (GHG) emissions, continue reducing the concentration of particulate matter
(PM) 2.5, significantly reduce the number of days of heavy pollution, and improve air quality,
China’s State Council announced a Three-Year Plan on Defending the Blue Sky in June 2018
(China Government Website, 2018b) which specifically focuses on Beijing-Tianjin-Hebei and
surrounding areas, the Yangtze River Delta, and the Fen River and Wei River Plains.
54