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New initiative set up to help bridge China’s $243 billion climate finance gap by 2020

Date
11 November 2013
New initiative set up to help bridge China’s $243 billion climate finance gap by 2020

BEIJING: With China’s estimated climate finance gap projected to reach $243 billion by 2020, The National Centre for Climate Change Strategy and International Cooperation, the China Clean Development Mechanism Fund Management Centre and The Climate Group today announced the set-up of the China Climate Finance Research project which aims to link up financial institutions and businesses and drive private capital flows into climate-smart sectors.

The Project, which represents a unique partnership between government organizations, non-profits and financial institutions, aims ito address China’s climate finance system limitations by developing new management mechanisms and policy frameworks, strengthening the resource allocation function of China’s capital markets and providing updated research in innovative policy tools.

Regions and cities will be a strong focus of the project, as they have a key role to play in raising China's climate finance funds and implementing a strategy of low carbon development.

The Climate Group’s Greater China Director, Changhua Wu commented: “China has already made huge investments in clean technology. The next decade could see China driving a global Clean Revolution; but for this to happen China will need to create the framework and incentives that can leverage large amounts of private finance using the still significant – and increasing – levels of public funding. The key aim of the China Climate Finance Research Project’s is to facilitate this process.”

Back in March, The Climate Group released the Shaping China’s Climate Finance Policy, one of the first efforts to quantify China’s climate finance needs. The report’s authors estimated that achieving China’s 2015 and 2020 emission intensity targets will require a total investment of up to US$333 billion by 2015, escalating to US$413 billion by 2020. Current public and private funds are not sufficient to cover the required investment, resulting in a financing “gap” of around 2% of China’s projected GDP in 2015 – or up to US$214 billion - increasing to US$208-243 billion by 2020.

China Clean Development Mechanism Fund Management (CDM) Centre Director Chen Huan, said: “Since its founding in 2007, CDM has done a lot of work in building and connecting the public and private sectors as well as national and international resources in order to achieve the level of climate finance China needs. The China Climate Finance Research project will allow us to continue and expand this work, especially as we try to leverage even more private capital.”

"In recent years, the international community has established mechanisms to address climate change funding; but progress has been very slow in China and globally”, commented the National Climate Change Strategy Research and International Cooperation Centre Director Li Junfeng. “The development of China’s national climate finance mechanisms in the context of the country’s stated strategy for low-carbon development is an urgent research issue, which makes the Project all the more important.”

During the launch event, leading experts including Li Junfeng, Director of the National Centre for Climate Change Strategy and International Cooperation, Chen Huan, Director of the China Clean Development Mechanism Fund, Mark Kenber, CEO, The Climate Group, Dr. Zheng Kangbin, Senior Investment Specialist, ADB and Han Xianfu, Chairman, China ACM, exchanged views on climate financing strategies for China’s climate-smart growth, and ways that the country will develop new capital sources and widen existing ones in order to achieve the volume of climate financing it will require in the coming decades.  

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Publication - Shaping China’s Climate Finance Policy

COP19 Warsaw: ‘Means of implementation’ is a critical issue for China

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