China’s Ministry of Finance (MoF) issued guidelines on May 30 calling for fiscal measures to support the China’s carbon emission peaking and carbon neutrality, as reported by Caixin on the same day. The document outlined multiple policy initiatives, including strengthening the guiding role of fiscal funds, improving green government procurement policies, enhancing international collaboration to tackle climate change, adjusting the tax system to meet low-carbon development requirements, and regulating the carbon emission accounting and supervision system to improve participation in the low-carbon market. According to the MoF, the new guidelines intend to establish a fiscal and taxation policy system that promotes the efficient use of resources and green, low-carbon development.
Shanghai Municipality, the Ministry of Ecology and Environment (MEE), and the MoF in April 2020 launched the National Green Development Fund (NGDF), which already raised RMB88bn (USD12.6bn) in its first phase of financing as of July 2020. According to the MoF’s recent guidelines, government investment funds, including the NGDF, shall play a leading role in the green transition. Moreover, the guidelines also proposed fiscal support to qualified green and low-carbon projects through government bonds. In terms of improving green government procurement policies, the guidelines ask local governments to prioritize clean energy-powered cars and ships when purchasing official business transport. As part of China’s efforts to bolster investments through fiscal tools in dealing with climate change, the MEE announced an upcoming trial run of a market-oriented incentive mechanism for climate investment and finance on May 29.