China’s climate action in the coming decade will play a decisive role in whether the world can limit global warming to 1.5 degrees Celsius. As the world’s largest source of CO2 emissions, China accounts for nearly a third of the global total. Based on its current trajectory, China’s emissions are expected to increase further by 7%-15% by 2030 above 2015 levels, which would more than offset the global decreasing trend. To ensure that China meets its own goals for advancing an ecological society, as well as its stated commitments to the Paris Agreement, climate and green finance needs to mobilize at an unprecedented scale.
This report provides an overview of the potential for climate finance, green finance and innovative finance to accelerate China’s decarbonization and support its transition to a green economy. As one of the first countries to emerge from the COVID-19 pandemic lockdown and start on a path towards recovery, coupled with the 14th Five-Year Plan to be released in March 2021, China faces a historic opportunity to outline a path for sustainable growth that also highlights the role of innovative green and climate finance.
The report addresses the following specific questions:
- Who are the key actors involved in China’s green/climate finance landscape?
- What is the policy and regulatory framework enabling and/or hindering green/climate finance in China? How could the policy framework be improved?
- What are the common financial instruments and sectors of green/climate investment? How might these be leveraged to scale up green/climate investments?
- What are some of the key barriers to innovative green/climate finance? How could these barriers be addressed?