The Green Finance Center Turns One

By Deborah Lehr and Gracie Sun

Today, the Paulson Institute’s Green Finance Center celebrates its one-year anniversary. Green finance is a critical part of promoting sustainable economic growth and development as well as supporting better protection of the environment. Our intent in launching this Center is to raise awareness of the need to pay for climate commitments and promote innovative thinking – and action – about how market mechanisms can be used to ensure a sustainable future.

Green finance has never been more essential than it is today. As Paulson Institute Chairman Henry M. Paulson, Jr. says: “Massive amounts of capital will be needed in order to meet the challenges posed to our environment and economic security. What is needed is a more effective green market infrastructure, with governments creating the conditions that encourage private green investments.”

This past year has seen a flurry of activity in the green finance space—internationally and in China—and the Center has been quite active.

The Center has taken deep dives into specific policy issues impacting the roll-out of China’s green finance initiatives. We published two policy briefs, “Constructing China’s MRV System” and “Governance of China’s National Carbon Market” that include recommendations by leading experts for the design and development of China’s national carbon market. And we are seeing encouraging signs that the Chinese government is understanding these recommendations based on the recently released Interim Regulations on the Management of Carbon Emissions Trading (Draft for Comment).

In addition, the Center has convened multiple roundtables and events over the past year focused on particularly policy issues related to green finance, carbon markets, and fintech. The goal of these events is to convene with purpose – to provide policy recommendations for key stakeholders, provide technical or expert support to those on the front lines, share case studies and other relevant experiences, and provide innovative and practical solutions to some of the key challenges China faces in implementing its green finance agenda. We have engaged with stakeholders in DC, Chicago, Beijing, and Singapore, attracting leaders from the highest levels of government, finance, and civil society to share and exchange key messages on the critical need for green finance to achieve sustainable development.

The most recent highlight for the Center was the launch of the Green Investment Principles for the Belt and Road, released at the end of 2018. It is our hope financial institutions will sign on to these principles to promote sustainable infrastructure development in BRI countries, which will see the largest infrastructure development in history.

In raising awareness, our “The Green Scene Blog” has covered significant policy announcements, such as President Xi Jinping’s major green finance agenda, China’s green industry catalog, and the national carbon market, and broken down key developments from big events like the International Green Finance Forum. We have also established a new web-based video interview series, which explores issues and insights from leaders in the world of green finance.

We are very proud of the work that our team has accomplished this past year. But we could not have made these achievements alone, and key partners—the Center for Finance and Development at Tsinghua National Institute of Financial Research, China Green Finance Committee (GFC), Energy Foundation China, the UN Environmental Program (UNEP), the Securities Industry and Financial Markets Association (SIFMA), the Institute of International Finance (IIF), Bloomberg Philanthropies, and the Sustainable Digital Finance Alliance, just to name a few—helped make our success possible.

Our inaugural year was a strong start in beginning to unlock the private capital needed to help  finance the world’s climate commitments and sustainable development, and momentum for green finance is moving in the right direction. But there is much that remains to be done. In the coming year, it is our hope is that we will continue to promote innovative means to accelerate the adoption of green finance in global financial markets. 

Deborah Lehr is Executive Director and Vice Chairman of the Paulson Institute.

Gracie Sun is Managing Director of the Green Finance Center and Senior Advisor of the Paulson Institute.