China’s carbon-neutrality plans now in the hands of central bank, which will ramp up green financing and establish carbon-trading market

Name: China to reduce carbon emissions by over 65 per cent, Xi Jinping says
Uploaded: 2021-04-16T12:30:11.000Z
Duration: 1 min 24 s
Description: China to reduce carbon emissions by over 65 per cent, Xi Jinping says

People’s Bank of China governor Li Gang says push to become carbon neutral by 2060 will cost nation nearly 139 trillion yuan (US$21 trillion)

China is working with other countries to establish an international standard for green financing, while IMF is advocating for a carbon tax on greenhouse gas emissions

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China’s central bank says it will push for the compulsory release of “climate change information” by listed firms and financial institutions. Photo: AP

Frank Tang

Published: 8:30pm, 16 Apr 2021Updated: 12:37pm, 19 Apr 2021

China’s central bank is now spearheading the country’s carbon-neutrality initiative, with plans to provide low-cost capital, boost green financing and invigorate the carbon-trading market to fund the ambitious undertaking.

Its involvement comes after President Xi Jinping vowed in September to make China carbon neutral by 2060.

The People’s Bank of China (PBOC) will create carbon-reduction-facilitation tools to provide funding support, and it will boost green financing channels, PBOC governor Yi Gang said at a joint seminar with the International Monetary Fund (IMF) on Thursday.

It did not reveal the amount of funding, however.

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China to reduce carbon emissions by over 65 per cent, Xi Jinping says

Yi estimated that the neutrality endeavour will cost China about 2.2 trillion yuan annually through 2030 - the year the country aims to have its carbon emissions peak - and then the yearly expenditure will rise to roughly 3.9 trillion over the following three decades. If those estimates hold up, it would bring the total cost to around 139 trillion yuan (US$21 trillion).

The total projected cost is considerably higher than a US$5 trillion estimate by consultancy Wood Mackenzie and the US$15 trillion forecasted by Boston Consulting Group in October.

“Government funding is far from enough,” Yi said at the online seminar, which was attended by officials from the securities, banking and forex regulators, environment ministry, economic planners and executives of eight state-controlled banks. “We must use market means to further mobilise public and private capital to support green economic activities.”