China is leading the pack to become the global leader in green finance. At the annual International Green Finance Forum, held in Beijing, Yin Yong, Vice Governor of the People’s Bank of China (PBOC) declared China the first country to establish a “relatively complete” green finance policy, saying that it will seek to promote these standards abroad. The Forum attracted 200 participants from international institutions around the world and was hosted by the Green Finance Committee of China. The Paulson Institute was a co-supporter of the daylong event.
The Forum, which was initially launched to highlight the work and recommendations of the G20 Study Group on Green Finance—created when China held the G20 Presidency—is the premier event on this topic in China. Participants covered a broad range of topics, including the ongoing role of the G20 in driving change in this field, responsible investing, green finance and the Belt & Road Initiative, and how innovative financing is driving behavioral change.
Deborah Lehr, Vice Chairman of the Paulson Institute, spoke in a panel discussion on responsible investing. The Institute, in partnership with the Chinese government, helped create, and is a non-commercial advisor to, the U.S. China Green Fund, which is bringing leading U.S. technology to China to help maximize energy efficiencies, especially in China’s buildings. Buildings account for approximately 40% of China’s greenhouse gas emissions, so this small action can have a significant impact. The Fund has made nearly $20 million in technology purchases to date, with significantly more planned.
In addition, the panel touched upon the important role that governments can play in the development — or lack thereof — of green development. In the case of China, the government is driving change through regulation, aggressive policies and top-down mandates to create innovative financing vehicles for green development. For the U.S., industry tends to be the leader in driving this type of change in financial markets, but government can play a key role in setting the tone, direction and creating incentives to encourage positive behavior. In the case of the Trump Administration, however, it is unlikely that government will be a major supporter of an active public role in green finance.
The Forum will convene again in Beijing next September.
