China’s Ministry of Ecology and Environment (MEE) is about to pilot a market-oriented incentive mechanism for climate investment and finance, in order to realize the country’s commitment to peaking carbon emissions by 2030 and reaching carbon neutrality by 2060, as reported by Shanghai Securities News on May 29. According to Ding Hui from MEE’s Department of Climate Change, the ministry has completed the assessment of the pilot incentive mechanism. Ding added that China will need to invest between RMB14tr (USD2.09tr) and RMB22tr (USD3.29tr) in the climate change area from 2021 to 2030 to peak carbon emissions and invest hundreds of trillions of Yuan from 2030 to 2060 to reach carbon neutrality.
Ding outlined a set of measures to promote climate investment and finance. He called for an explicit access system of the climate investment and finance market to accurately support projects that work toward low carbon transition, a transparent climate investment and finance platform for investors and financial institutions to lower the market transaction cost, as well as a unified and science-based carbon emission accounting and disclosure system for effective supervision. He also called on local governments to bolster climate investment and finance through policy guidance and technical support while guiding the market to attract private and foreign capital into the climate investment field. Previously, in March 2022, the EU finance ministers agreed on new rules for imposing carbon tariffs from 2026 on imports from countries with weaker carbon emission standards. The carbon border levy could have a significant impact on the carbon-intensive industries in developing countries like China.