China needs $1 trillion green finance to cut pollution

Shanghai / Bloomberg

China’s cities need about 6.6 trillion yuan ($1 trillion) of green financing over the next five years to reach its pollution-reduction targets, according to a report.
Financial markets will need to cover as much as 90 percent of investment funding for clean transportation, energy-efficient buildings and renewable power through 2020, according to the executive summary of the report, “Green Finance for Low-Carbon Cities,” which was commissioned by the Green Finance Committee of China Society for Banking and Finance and Bloomberg Philanthropies.
“Public funding should play a leveraging role and facilitate the entry of a largeamount of private funding in the low-carbon development of Chinese cities,” according to the report. “The financial sector should establish a system to differentiate potential projects based on their environmental benefits, so that green finance can effectively direct funding to low-carbon urbanization.”
As millions of Chinese have flocked to economic opportunities in cities, urban pollution has grown and forced the government to respond to public health concerns. Beijing’s smog hazards prompted authorities in December to impose limits on factory output and construction. The volume of pollution from China’s export manufacturers has also contributed to smog levels in Japan and the U.S. west coast, according to the U.S. National Academy of Sciences.
Green transportation, including 3,000 kilometers (1,865 miles) of new rail and a 4.8 million fleet of electric cars, will need about 4.45 trillion yuan of funding, according to the report. Making buildings more energy efficiency will require 1.65 trillion yuan while another 500 billion will be needed to install 64 gigawatts of solar power, according to the report, which was written in partnership with the Paulson Institute, Energy Foundation China and the Chinese Renewable Energy Industries Association.
Michael Bloomberg, founder and majority owner of Bloomberg News and its parent company Bloomberg LP, helped sponsor the research via Bloomberg Philanthropies. Bloomberg also serves as the United Nations Special Envoy for Cities and Climate Change. China has pledged to peak carbon emissions around 2030 when more than 1 billion people are expected to be living in its cities, according to report said. Reducing urban pollution — which account for 70 percent of the country’s total energy-related carbon emissions — is seen as key for China to reach its climate targets.