Chinese Central Bank Says It Will Include Climate Change Risk in Policy and Prudential Regulatory Framework

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A senior official from the People’s Bank of China (PBOC) has reiterated its support for green finance policies, including the consideration of climate change risk factors during the formulation of central bank policies.

PBOC deputy governor Liu Guiping (刘桂平) said that the “vigorous development of green finance is the necessary choice for driving the high quality growth of the Chinese economy and society, and a key means of achieving green recovery.”

“Looking to the future, [we] must continue to drive the innovative development of Chinese green finance.”

Liu made the remarks on 10 December at the China Green Finance Reform and Innovation Forum (中国绿色金融改革创新研讨会).

Green finance policy measures highlighted by Liu include:

  1. Making full use of green finance to support green recovery. “Continue to diversify the policy tool box to support green finance, and make full use of market mechanisms to continually improve the financing environment for green industries and green projects. Use RECP to deepen international cooperation in green finance, and support international green financing capital to participate in the development of the 14th Five Year Plan, and share the dividends of China’s green development.”
  2. Innovative development of green finance to support the fulfilment of the “30 – 60 targets” of achieving peak CO2 emissions before 2030, and achieving carbon neutrality prior to 2060. “Create conditions to include climate change-related risk in the policy and prudential regulatory framework of the central bank, the high-quality development of a green finance standards system, and the acceleration of the formation of systems to benefit carbon emission reductions. Systemically drive the growth of carbon emission credit and carbon finance markets, and raise the efficiency of carbon price formation. Continuing to drive the development of green finance markets and product innovation, and encourage financial institutions to support large-scale energy enterprises in their orderly withdrawal from the fossil fuels market, and the vigorous development of emissions reductions technologies.”
  3. Deep development of grass-rates implementation of green finance reforms and innovations. “China is the only country in the world to establish green finance reform and innovation pilot zones, and the ‘bottom to top’ development of green finance reform and innovation pilot zones has already become the calling card of China’s development of green finance. [We] need to continue to effectively perform work to develop pilot zones, support the setting of carbon neutral targets in advance by regions that satisfy requirements, encourage pilot zones to actively explore new green finance development models, drive green finance to support the development of areas including renewable energy, green building and clean transportation, and play an active role in servicing the coordinated development of Jing-Jin-Ji, and the integrated development of the Greater Bay and Yangtze River Delta regions.

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