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The Role of Climate Finance in Supporting China’s Decarbonisation Targets

Image: Unsplash (Christian Lue)

June 2022 – At an online networking meeting on 9 June 2022, more than 80 participants discussed the role of climate finance in the implementation of China’s national climate targets. The meeting was hosted by German Industry & Commerce Greater China (AHK Greater China) as the organisation tasked with implementing the Carbon Market Cooperation Project on behalf of the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV).

In his opening remarks, Thomas Forth from the German Federal Ministry for Economic Affairs and Climate Action (BMWK) highlighted the importance of climate finance programmes in achieving the global climate protection goals. As he pointed out, less prosperous nations are particularly dependent on financial assistance in this regard. Germany’s federal government therefore intends to double its contribution to international climate finance and help to mobilise USD 100 billion in climate finance worldwide by 2025. The first Chinese speaker was Professor Chen Peng from the Chinese Academy of Environmental Planning at the Ministry of Ecology and Environment (MEE). She gave insights into the latest political processes relating to climate investments and climate finance in China.

Professor Wang Yao from the International Institute of Green Finance (IIGF) at the Central University of Finance and Economics in Beijing then analysed current local pilot projects in the field of climate-related investments and climate finance in China. In particular, Professor Wang highlighted the significance of a pilot plan published in December 2021. The last speaker, Dr Wolfram Erhardt, head of the KfW’s office in Beijing, outlined the development bank’s activities and experiences relating to climate finance in China. The panel discussion that followed focused on the vital role that climate finance plays in supporting China’s decarbonisation targets. Professor Chen put forward her view that the biggest challenges in China lie in the systemic deficiencies of the carbon pricing mechanism and the fact that low-carbon technologies, such as those used to generate electricity, are still largely more expensive than established technologies. Professor Wang also referred to estimates that suggest a total of around CNY 100 trillion in additional finance will have to be mobilised to achieve China’s decarbonisation targets by 2060. It was proposed that a national low-carbon transition fund could be set up in order to attract funding from the private sector.

Additional information
A detailed report on the networking meeting features in the June issue of the Econet Monitor magazine (German edition), published by AHK Greater China in Beijing. The issue is available to download here: Econet Monitor Juni 2022 (German edition only).

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