China encourages green finance, new-energy vehicles after carbon-neutral pledge
How will China meet its goal to reach carbon neutrality before 2060? Government agencies say they will prioritize climate-friendly financing, and the replacement of gas-burning cars with hybrids or new-energy vehicles. Details on the phasing out of coal remain uncertain.
Last month, Chinese leader Xรญ Jรฌnpรญng ไน ่ฟๅนณ made a significant and unexpected public commitment at the United Nations: that China would โachieve carbon neutrality before 2060.โ
- Environmentalists welcomed the setting of a goal โ and wagged fingers at the United States, which is now the only major economy without a carbon-neutralย target.
- Since China set its goal, Japan and South Korea have bothย said they would decarbonize by 2050, the same time frame to which the European Union and the United Kingdom have committed.
- Chinese diplomats have become more outspoken about criticizingย the United States on climate action, saying it is a โconsensus-breaker.โ
But how will China achieve its goal?ย Government ministries are now beginning to follow up on Xiโs pledge with guidelines and more specific projections for different sectors:
- Green finance:ย โIn a set of guiding opinionsย backed by five government ministries, Beijing said it would encourage private investment and foreign capital to back green bonds and fund climate-friendly projects,โ Bloomberg reports.
- New-energy vehicles: โVirtually all new cars sold in China in 2035 will be either hybrids or new-energy vehicles (NEVs),โ a government blueprintย says, per Caixin.
Power generation, the sector that contributes the most emissions in China, is now the one to watch.
- Before September, China was โexpected to go on a new coal-fired power construction spree, but government scholars have been forced to revise their old draftsโ after Xiโs pledge, Reuters reports.
- โBy 2025, China will be close to achieving peak emissions as a result of more ambitious actions to bolster renewables, pivot toward market mechanisms, and enhanced energy efficiency measures,โ the MacroPolo think tank projects, as part of its โForecast 2025โ China series.
Details of the 14th Five-Year Plan, covering the years 2021โ2025, are expected to be released tomorrow. One thing it will likely include, per Reuters, is a goal to launch a โnationwide emissions trading schemeโ in that time frame โ but this is actually another delay, since the scheme was pledged by Xi in 2015, set up in 2017, and โexpected to launch this year.โ