China needs to invest 2.2 trillion yuan a year until 2030 and 3.9 trillion yuan a year from 2030 to 2060 in order to match carbon reduction targets set by the government, central bank governor Yi Gang said Thursday. He also mentioned that China is expected to launch a national carbon emissions trading market at the end of June this year.
To achieve these investments, government funding alone is far from enough, and more public and private sector funding needs to be channelled in a market-based manner, Yi said at a seminar on the same day. He also pointed out that from carbon peak to carbon neutral, the EU will take 70 years, the US 45 years and China only about 30 years, a short time and steep curve, with financial institutions facing significant risks, so the authorities should urge these institutions to start the transition as early as possible.
Yi revealed that a national carbon trading market will soon start operation, and the relevant authorities have proposed to gradually expand the proportion of paid allocation of carbon emission allowances to maximize the incentive and constraint effect of carbon prices.
A research institute recently said that China’s plan to boost its coal-fired power generation capacity is “contradictory” to its commitment to achieve carbon neutrality by 2060. To meet these goals, China must impose a moratorium on the construction of new coal-fired power plants and phase out existing ones.
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