China says it will turn to international investors to further its green crusade as it seeks to become a carbon-neutral country in the next 40 years.
The Asian powerhouse said it would incentivise green financing by encouraging climate-friendly projects, enticing international investors to get behind green bonds, phasing out conventional petrol-powered cars and launching a carbon-trading scheme.
Beijing has released a set of climate finance guidelines backed by five core government ministries. The guiding opinions come a month after Xi Jinping’s speech at the 75th United Nations General Assembly (UNGA) where he said China would become a carbon-neutral nation before 2060.
Before Xi’s surprise UNGA announcement, China was preparing to fund a swathe of new coal-fired plants, but Beijing policymakers have had to ”revise old drafts”, said Reuters.
The shift from a mega-polluter to a zero-polluter could cost China nearly $15 trillion, according to Bloomberg.
Under the new policy, China’s carbon trading scheme, which has been in the works since 2017, is expected to launch this year in an expanded form. Beijing said the carbon trading system would accommodate industrial and financial organisations as well as individuals.
Beijing hopes to encourage foreign investors to hold yuan-based green tradeables. The government said it would help domestic entities develop yuan-based climate funds while supporting off-shore trade on “green” products.
China is phasing out traditional internal combustion engine motor vehicles by 2035. All new cars sold in China after 2025 will either be a conventional hybrid, plug-in hybrid or electric new energy vehicles, according to the China Ministry of Industry and Information Technology.
Dimitri de Boer, chief China representative of ClientEarth, said the new policy indicates the Chinese government and all its ministries are on the same page – trying to attract climate-friendly investors. The ministries of the National Development and Reform Commission, Ecology and Environment, and the People’s Bank of China have all signed the new policy.
China will be near peak emissions by 2025 as a result of “ambitious actions to bolster renewables”, according to think tank, MarcoPolo.
Since China has pledged to go carbon neutral in the coming decades, South Korea and Japan have followed suit and pledged neutrality by 2050. The US is now the only major nation with no set plan to decarbonise.