China will direct more private capital to better finance the country’s programs to fight climate change, China’s chief climate negotiator said Friday.
Su Wei, who is also director-general of the Department of Climate Change of the National Development and Reform Commission (NDRC), said China is piloting carbon market schemes in seven regions.
Carbon markets allow enterprises to trade their carbon quotas and provide a platform for private capital to make money from carbon quotas set by local governments to tackle climate change.
Su said the NDRC will expand carbon market pilot programs to more regions in 2013.
Su made the remarks at a seminar on climate finance co-sponsored by the Central University of Finance and Economics (CUFE) and the Counsellors’ Office of the State Council, a think tank for China’s Cabinet.
China has allocated a lot of its central budget toward efforts to cut carbon emissions, and under market forces, private capital is also needed to fund the country’s emissions reduction work, according to Su
Greenhouse gases that are heating up the planet were actually emitted by developed countries in the past 50 to 200 years, and therefore, they are supposed to provide funds to help developing countries in addition to their own moves to cut emissions, said Su.
But developing countries should not rely heavily on those already mired in economic crisis at home, Su added.
Liu Yanhua, former vice minister of science and technology, said at the seminar that combining the low-carbon economy with capital support is a trend.
However, China’s financial services to facilitate greenhouse gas cuts remain immature, Liu said.
Ye Yanfei, an expert with the China Banking Regulatory Commission, said China needs to link together carbon markets in different regions and set up a national market where carbon emissions are priced based on supply and demand.
Yuan Qingdan, a researcher with the Ministry of Environmental Protection, said in order to solicit capital to fund emission cuts, China needs to first step up efforts to supervise enterprises’ carbon reduction moves.