Green finance is vital to promoting the realization of carbon neutrality goals, and is an important part of the policy framework of China’s “dual carbon” goals. However, China’s current green financial system still has many problems in accordance with the requirements of the “dual carbon” target, and it will face new challenges in the process of carbon reduction transformation. At the Tsinghua Wudaokou “Carbon Neutral Economy” Forum held in Beijing recently, many participants said that the “dual carbon” goal will release huge investment opportunities and development opportunities, but the potential financial risks and “green washing” risks are worth preventing and alert.
Zhang Xiaohui, Dean of Wudaokou School of Finance, Tsinghua University, stated in her speech that according to United Nations calculations, to achieve the temperature rise control targets of the Paris Agreement, the total global investment required is approximately 90 trillion US dollars. The realization of “carbon neutrality” in my country also requires a huge amount of capital investment. According to preliminary estimates by many institutions, the investment required to realize the “dual carbon” strategy in my country is about 150 trillion to 300 trillion yuan. This means that in the future, my country will invest an average of 3.75 trillion-7.5 trillion yuan in the “dual carbon” field each year, which is about 10% of the annual investment.
Such a scale of “green” investment will undoubtedly bring new opportunities for economic growth in China and the world, but it also brings a problem. Where does it come from? According to Zhang Xiaohui’s analysis, past empirical data shows that the proportion of green finance’s financial support for carbon neutrality will reach 90%, while the proportion of government financial support is only 10%. The development of green finance can effectively guide social capital into the fields of green and environmental protection, optimize the allocation of production factors in the whole society, and play an indispensable pillar role in providing carbon neutral funds. At present, the Central Carbon Peak and Carbon Neutrality Leading Group has organized and formulated and successively released the “1+N” policy system. “1” refers to the carbon peak and carbon neutral guidance, and “N” includes the pre-2030 One of the carbon peak action plan and the policy measures and actions in key areas and industries is “Develop green finance to expand financial support and investment.”
But she also reminded that in the process of developing green finance, we must be alert to the potential social and economic costs of irrational investment. There are countless examples of financial risks. Therefore, in the process of achieving the “dual carbon” goal, we need to make rational decisions, act prudently, and earnestly do a good job in early warning of production capacity and risk monitoring, so as to work together to ensure stable and long-term green development. “
Xiao Gang, the former chairman of China Securities Regulatory Commission, pointed out in his speech that after the “14th Five-Year Plan”, China’s green finance shifted to focus on carbon reduction. It will have a long-term and systemic impact on the model reform of the financial industry. It will also bring new challenges to monetary policy and macro-prudential policies.war. “The’dual carbon’ goal has many impacts on the financial system. First, it will bring huge investment and development opportunities to the financial industry. However, the promotion of the’dual carbon’ goal may also become an important source of systemic financial risks.” He said that we must be alert to various risks in the process of green transformation. For example, according to some institutions, the non-performing loan rate may rise to 11%, the bond default rate may increase by 4 times, and the stocks of listed companies may be substantially impaired.
Xiao Gang believes that the “dual carbon” target poses a series of new problems and challenges for monetary policy and macro-prudential policies. For example, how to deal with the relationship between carbon reduction and economic growth, the relationship between carbon reduction and energy security, and the relationship between carbon reduction and affordability? These will all have an impact on inflation, interest rates, and monetary policy tools.
For financial institutions, Xiao Gang said that the next step should be to further strengthen environmental risk analysis. A series of analysis tools and methods are used to help financial decision-makers assess the financial impact of environmental risks and incorporate environmental risks into the risk management and asset allocation decision-making system. Environmental risks are divided into physical risks and transformational risks. These risks may increase investment risks. As a financial institution, it is necessary to strengthen the analysis and early warning capabilities of identifying and monitoring environmental risks.
Xiao Gang also particularly emphasized that in order to promote the development of green finance, it is necessary to further unify the regulatory rules, realize the coordination of green finance development and the deleveraging of the financial industry, and prevent green project leverage. The problem of excessively high rates, idling capital and “green washing”—that is, in the name of supporting the “dual-carbon” goal, actually using “green” money to do “green” things, “we must further strengthen the innovation of green finance. Supervision and coordination, the establishment of a green financial analysis, monitoring and early warning mechanism, strengthening the supervision of the use of funds, and effectively preventing and dissolving financial risks.”
On the same occasion, the BRICS New Development Leslie Maasdorp, deputy bank and chief financial officer, emphasized the improvement of the financial supervision mechanism under the new goal of global green development. “Before the emergence of the new regulatory framework, the biggest challenge is how to expand the coverage of this framework and achieve global harmonization.” He cited China’s green finance leader and dean of the Beijing Institute of Green Finance and Sustainable Development Ma Jun’s point of view stated that there are more than 20 different green finance catalogs or sustainable finance classification methods in the world. Therefore, green finance standardization is very important and necessary. This can ensure that different business entities are on the same platform and on the same platform. Green and sustainable business is carried out within the framework. “It is very difficult to form a unified sustainable financial standard. Even if we can reach a unified opinion and agreement, the degree of standardization of this agreement is very limited. I hope that such an agreement or standard can be unified and the scope can be broadened.These are very critical in the future. “