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China faces US$6.5 trillion green financing gap to reach 2060 net-zero carbon emissions goal, WEF report finds
- China faces a shortfall of 44 trillion yuan in green financing over the next four decades, says the report by WEF and Oliver Wyman
- Its transition to net-zero will require massive funding to support technological breakthroughs in carbon-heavy sectors, says report
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China faces a shortfall of 44 trillion yuan (US$6.5 trillion) in green financing over the next four decades as it strives to hit its carbon neutrality goal, according to a new report.
The country will need to raise about 140 trillion yuan from green bonds and other environmentally friendly funding tools to become carbon neutral by 2060, but will fall short by 44 trillion yuan, said the report published by the World Economic Forum (WEF) and consulting company Oliver Wyman on Thursday.
This means it needs to fill a funding gap of 1.1 trillion yuan each year between 2020 and 2060 in the financing of green innovative technologies across all sectors including electricity, steel, mobility and construction, said the report.
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“China’s net-zero commitment will require a revolutionary transformation of its economy driven by the widespread adoption of green technologies, all of which will require enormous investment,” said Qian Hang, a partner at Oliver Wyman in a statement on Thursday. “China’s unique economic model will shape this transition.”
President Xi Jinping pledged to lead the country to carbon neutrality – meaning its net carbon emissions will reach zero – by 2060, in a speech to the United Nations General Assembly in September, 2020.
China’s net-zero transition is unique compared to the United States and countries in the European Union, because of its heavily industrialised economy, according to the report.
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