On Eve of G20 Summit, China Puts Green Finance at the Fore
Date: 02 Sep 2016
Ahead of the G20 leaders summit this weekend in the Chinese city of Hangzhou, China’s State Council approved a set of guidelines described as an essential next step for implementing the country’s strategy for “ecological civilization”.
The decision accelerates China’s existing policy of greening its financial sector. “Guidelines on Establishing the Green Financial System” was issued by on 31st August by seven government agencies. These included the People’s Bank of China (PBoC) with which UN Environment co-convened China’s original Green Finance Taskforce in 2014/15. In addition, UN Environment is working with the PBoC and the Bank of England, which are co-chairs of the G20 Green Finance Study Group (GFSG).
Commenting on the importance of this area, Zhou Xiaochuan, Governor of the People’s Bank of China, said: “In China, establishing a green finance system has become a national strategy.”
“The commitment by China’s most senior leadership to greening the country’s financial system reinforces the country’s ambition to both reshape its domestic financial system and serve the needs of green inclusive development. We hope this will encourage other nations to do likewise.”
A total of US$600 billion per annum is needed to finance green projects such as environmental remediation and protection, renewable energies, energy efficiency and green transportation. Less than 15% of this total will come from public or government sources, highlighting China’s senior leadership’s motivation to approve guidelines capable of retooling the country’s financial system to provide the necessary investment.
The decision will reverberate among G20 leaders arriving ahead of the Hangzhou Summit beginning on Sunday. It is widely expected that green finance will be high on the agenda with G20 central bankers and finance ministers having already declared a joint determination to accelerate what the UN Environment’s Inquiry called a “quiet revolution” in its first global report, The Financial System We Need.