The Paulson Institute and the Chinese government’s Office of the Central Leading Group on Financial and Economic Affairs convened top Chinese securities, banking, insurance, energy and housing regulators, as well as leading U.S. and Chinese financial and industrial companies to discuss the U.S.-China Green Building Energy Efficiency Fund, which was announced last September during President Xi Jinping’s visit to the United States. The Paulson Institute is working with the Chinese government to help launch the fund, which aims to drive the development of environmentally sustainable buildings through the deployment of U.S. technology.
“The documents from the Fifth Plenary Session of the 18th Communist Party of China and the Integrated Reform Plan for Promoting Ecological Progress both clearly support the creation of a green development fund. It’s time to take actions to accelerate its implementation. Promoting the establishment of a U.S.-China Green Building Fund is a concrete step forward,” said Liu He, head of the Office of the Central Leading Group on Financial and Economic Affairs.
“There is plenty of capital in China and elsewhere in the world, but it needs to be allocated appropriately to low-carbon sectors that can also generate new sources of economic growth and create new jobs,” said Paulson Institute Chairman Henry M. Paulson, Jr. “With the right incentives and regulations in place, the private sector can work together with the government to unlock a truly sustainable economic future for China.”
“The entire securities and futures industry is very supportive of green development. In addition to support from the well-known stocks and bonds sectors, we are also giving very careful consideration to the promotion of green development through the futures markets and private equity markets,” said Fang Xinghai, director general of the Economic 4th Bureau of the Office of the Central Leading Group on Financial and Economic Affairs and vice chairman of the China Securities Regulatory Commission.
“Green finance presents an opportunity to support China’s transition to a low carbon economy. With the creation of this fund, we bring together the best of U.S. technologies and Chinese market opportunities in a practical way to support this goal,” said Deborah Lehr, senior fellow at the Paulson Institute.
With China designating green finance as a priority issue during its presidency of this year’s G20 meeting, today’s meeting focused on the creation of efficient financing tools to support China’s transition to a low-carbon economic model. The participants discussed specific mechanisms for the Green Building Energy Efficiency Fund, U.S. technologies that could best be deployed with the help of the fund, and projects for financing consideration.
The intent of the fund is to enable and accelerate the deployment of U.S. technology and expertise in the Chinese market to substantially reduce CO2 and other climate-related emissions, while improving energy efficiency, promoting industrial productivity, encouraging cross-border innovation, and creating green jobs. To achieve those goals, the fund aims to find ways to bridge the higher upfront costs of green technologies with the longer-term returns. Buildings account for more than 30% of global greenhouses gas emissions, and China is the world’s largest builder, with plans for 50% of all new construction for the foreseeable future. The goal in developing this unique cross-border Public Private Partnership is to marry the best of U.S. technology, know-how and experience with Chinese creativity, market scale and rapid commercialization.
Participating and speaking in the forum in Beijing were Yi Gang, vice governor of PBOC; Zhou Mubing, vice chairman of CBRC; Fang Xinghai, vice chairman of CSRC; Chen Wenhui, vice chairman of CIRC; Chen Yiming, chief engineer of MOHURD; Zhang Yuqing, deputy director of National Energy Administration; Ma Xin, deputy secretary general of NDRC; Jiang Deguo, vice governor of Hebei Province; Zhu Xiaoming, mayor of Zhenjiang; Zhang Junfeng, vice mayor of Zhengzhou; and Zhong Hongjiang, vice mayor of Shaoxing.
In addition to the green building fund initiative, the Paulson Institute is also working with the People’s Bank of China to help provide recommendations on the development of a global green finance system ahead of the G20 Leadership Summit, which will be in Hangzhou in September. These recommendations will be sent to the G20 Green Finance Study Group, which is chaired by the People’s Bank of China and the Bank of England, for the study group that is finalizing a synthesized report to be presented at the G20 meeting in September.