As countries struggle to implement their climate change commitments, one of the biggest challenges is finding the necessary financing. Green finance is a growing trend as countries seek innovative ways to attract private sector capital to finance these commitments. The development of carbon markets, an increase in green lending, a focus on sustainable infrastructure, and innovative uses of fintech to finance sustainability are all providing new and innovative access to capital.
China, the largest carbon emitter in the world is also the boldest in the development of a green finance infrastructure. In a recent All About the Green podcast episode from the Institute of International Finance, Deborah Lehr, Executive Director and Vice Chairman of the Paulson Institute, explains why green finance stands at an inflection point in China and the global implications.
“It is essential to promote practices and policies that support a low-carbon economy if China is to reach its goals on climate,” says Lehr. The Chinese have an ambitious agenda for green finance, which if they succeed, could serve as a model for other countries. In addition, China has stated that it plans to ensure that infrastructure development along the Belt and Road (BRI) countries is handled in a sustainable manner. This is essential as the planned development along the BRI, if not promoted in a green manner, could result in carbon emissions higher than those in China. There are also concerns that China continues to finance projects that would not be considered a green investment in most of the rest of the world, such as coal fired power plants.
This scenario is one of many across the world where decisions to invest in green finance are equally balanced between the need to meet goals on low carbon emissions while ensuring continued economic growth. Learn more and listen to this dynamic podcast. Available now.