Green Finance: Seeing through China’s Commitments at COP21
The Paris Agreement – universally acknowledged as the world’s first universal climate agreement – was adopted in December at the United Nations climate change conference (COP21). Both legally-binding and voluntary actions were committed in a variety of areas, which are identified as imperative to curb global temperature rise well below 2oC, or even more ambitiously to 1.5oC. These include mitigation and adaptation efforts that require further reduction of CO2 emissions, as well as capacity building to deal with climate impacts. The accord will pose certain challenges to developing countries that attempt to balance environment protection with continued economic growth. New technologies, energy sources, and economic structures all demand significant up-front cost. Finance, therefore, holds the key to achieve greener prosperity. China – the top emitter – welcomes the deal and pledges to implement it, through for instance Intended Nationally Determined Contributions (INDCs). But how will China’s domestic financial system and institutions change to accommodate this? Are such changes included in the 13th Five Year Plan (FYP), due to be released in March 2016? This briefing aims to answer these central questions.