Zhao Baiji, member of the National Committee of the Chinese People's Political Consultative Conference: Develop transition finance and promote the transformation of high-pollution and high-energy-consuming industries
Since China's formal accession to the Paris Agreement in 2016, China has actively participated in global climate governance and achieved remarkable results. The National Development and Reform Commission, the Ministry of Housing and Urban-Rural Development and other 10 departments recently jointly issued the "Green and Low-Carbon Transformation Industry Guidance Catalogue (2024 Edition)" (Hereinafter referred to as the "Catalogue"It provides support for cultivating and strengthening new drivers of green development and accelerating the green transformation of development modes. China's low-carbon transformation has ushered in more development opportunities.
However, to address climate change and promote low-carbon transition, in addition to vigorously developing green industries, it is also necessary to use a variety of financial instruments in a coordinated manner.
In this regard, Zhao Baiji, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and Chairman of PwC Asia Pacific and China, said in an interview with China Environment News: "In the next step, we should also develop transition finance, promote the low-carbon transformation of traditional high-pollution and high-energy-consuming industries, improve the carbon emission trading market, give enterprises more incentives to reduce emissions, accelerate the implementation of climate investment and financing pilots, and promote technological innovation related to carbon reduction and reduction." ”
The Transition Finance Catalogue needs to be further refined
In recent years, China has made great progress in the development of green finance. However, in order to further promote low-carbon transformation, it is also necessary to strengthen the use of a variety of financial means in combination with various factors such as China's energy structure, industrial structure and economic development stage.
Zhao Baiji believes that on the one hand, the pricing mechanism of the carbon emission trading market needs to be improved and optimized. China's carbon market is mainly composed of a voluntary carbon market and a mandatory carbon market. In January 2024, the voluntary carbon market was relaunched, and a national mandatory carbon market is now taking shape.
"However, the trading liquidity of the mandatory carbon market is not high, and the price discovery mechanism of the market is inefficient, resulting in the domestic carbon emission price being significantly lower than that of overseas markets such as the European Union, and it is difficult to form an effective incentive for enterprises to reduce carbon emissions. Zhao Baiji introduced that at present, carbon trading only allows spot trading, and the product is too single, which is also one of the reasons for the low market activity.
The State Council recently promulgated the Interim Regulations on the Administration of Carbon Emission Trading (Hereinafter referred to as the "Regulations"), effective from May 1, 2024.
Zhao Yingmin, Vice Minister of the Ministry of Ecology and Environment, pointed out that the "Regulations" are based on the current situation of China's economic and social development, and have made corresponding provisions on the difficult problems existing in the current carbon market, such as the gradual implementation of the carbon quota allocation method combining free allocation and paid distribution, the establishment of a market stability mechanism, and the provision of rich trading entities and products. The carbon market is expected to usher in a new situation of development.
According to Zhao Baiji, the name of the "Catalogue" has been adjusted from the original "Green Industry Guidance Catalogue" to the "Green and Low-carbon Transformation Industry Guidance Catalogue", which includes low-carbon transformation-related industries, reflects the orderly connection between green finance and transition finance, provides a basis and guidance for various localities and departments to formulate and improve support policies, and fully reflects the "double carbon" work orientation.
"But the Transition Finance Catalogue needs to be further refined. Zhao Baiji believes that due to the variety of transition finance catalogues, obvious industrial characteristics, and high technical content, there may be greater challenges in the implementation process. Financial institutions need more guidance to enrich the supply of relevant products and services. At present, transition finance is dominated by debt, and there are few equity, funds and other types of instruments.
Promote the innovation of carbon financial products and strengthen information disclosure
In the face of the current problems in the low-carbon transition, Zhao Baiji suggested, "First of all, we should expand the coverage of the carbon market industry and the scope of participants, implement the total carbon emission reduction control target, and promote the innovation of carbon financial products." ”
"It is recommended that the Ministry of Ecology and Environment take the lead in expanding the research and demonstration of the industry coverage of the national carbon market, and promote the orderly inclusion of seven major industries such as petrochemicals, chemicals, building materials, iron and steel, nonferrous metals, paper and aviation into the carbon market as soon as possible in accordance with the 14th Five-Year Plan. Consider allowing non-performing entities (Such as financial institutions and other third parties) to enter the market and realize the diversification of trading entities. Zhao Baiji analyzed.
In addition, by consolidating the quality of carbon emission data, the monitoring, reporting and verification of carbon emission accounting data will be improved (MRVsystem, so as to promote the formulation of total carbon emission targets, clarify the implementation of carbon reduction and emission reduction tasks by enterprises, and increase trading momentum. At the same time, in terms of carbon financial products, financial institutions are encouraged to further innovate and design and launch risk management tools such as carbon futures, carbon forwards, and carbon options, so as to guide more investment behaviors and improve the liquidity and pricing efficiency of the carbon market.
"Encourage innovative practices in transition finance, enrich products and services, and strengthen information disclosure. Zhao Baiji suggested that all local and financial regulatory authorities should actively introduce and improve relevant policies and measures according to the focus of green and low-carbon transformation and development in their respective regions and fields, encourage the exploration of innovative practices of finance to help green and low-carbon transformation, and summarize experience in a timely manner, launch excellent practice cases and more quantitative operation guidelines, and avoid the risk of "fake transformation" to the greatest extent.
At the same time, we will guide financial institutions to increase their efforts in green and low-carbon transformation services, formulate financial service plans for transformation enterprises, research and develop targeted products and services, and comprehensively use diversified tools such as credit, bonds, equity, guidance funds, trusts, and insurance to provide support.
The reporter noted that when the "Catalogue" was released, the 10 departments also proposed that all localities and departments could introduce and improve relevant policies and measures according to their respective regional and field development priorities and on the basis of the "Catalogue", and give encouragement and support to production, circulation, consumption and other links, so as to create a good environment for the development of related industries. All relevant departments may, on the basis of the "Catalogue", formulate and revise the refinement of the catalogue, sub-catalogue or expansion of the catalogue according to the actual work, improve the operability of the "Catalogue", and guide all sectors of society to better support the development of relevant industries.
"In terms of information disclosure, the Ministry of Finance and the China Securities Regulatory Commission (CSRC) can take the lead in encouraging enterprises to have a better understanding of the standards issued by the International Sustainability Standards Board (ISSB) and the Self-Regulatory Guidelines for Listed Companies – Sustainability Reports issued by the Shanghai, Shenzhen and Beijing Stock Exchanges.Trial）（Draft for CommentsFrom the aspects of governance structure, development strategy, risk control and management, optimize the management system, improve management capabilities, and improve the quality of information disclosure. Zhao Baiji said.
In addition, he suggested that the climate investment and financing system should be improved, and the introduction of basic rules and systems such as carbon accounting and information disclosure should be promoted in a coordinated manner.
"The Ministry of Ecology and Environment, the National Development and Reform Commission, and the People's Bank of China should jointly summarize and form replicable and scalable advanced experience and good practice cases in climate investment and financing on the basis of existing pilots, expand the scope of pilot projects in a timely manner, and build a database of climate investment and financing projects at the national and local levels. Zhao Baiji explained.
Specifically, it is necessary to promote the application of data elements, guide financing entities to establish a set of effective monitoring, reporting and verification systems, encourage local governments to build carbon emission monitoring platforms and enterprise carbon account systems, and open up the standards and rules of carbon accounting, information disclosure and other aspects of carbon market, transition finance and climate investment and financing.
