By Paul Davies and Andrew Westgate
On 18 October 2017, the 19th National Congress of the Chinese Communist Party will convene, after the week-long National Day holiday, marking one of the most important dates on the Chinese political calendar. Among the issues that National Congress members will surely discuss, is the importance of implementing strategies to further China’s green development. A crucial aspect of this discussion will be determining how funding can be channelled towards clean development.
China has achieved unprecedented economic growth over the last four decades, and is predicted to become the world’s largest economy before 2030, overtaking the United States. A by-product of this success however, has been severe damage to China’s ecology and environment, which the country is already taking action to address.
In order for China to transition to a development path that facilitates environmentally sustainable economic growth, the country must make financing available for green projects, As Latham has previously written, China has been actively promoting green finance on the international stage. This has proven challenging, however, as solar and wind energy projects typically take a long time to become operational.
China is already implementing measures to encourage green finance, recently launching a green stock index in order to track the green performance of listed companies, and to serve as a sustainability benchmark for companies. Many view this development as an important way of supporting green finance in China, as it enables the country to provide transparent information for potential overseas investors.
As the National Congress continues to enable green finance, it will have to balance the need for clean energy investments with attempts to control the debt burdens of local governments and companies. The steps that China takes in this regard will offer important lessons for other countries facing similar challenges.
Read more on China’s environmental policy:
China Unveils Plan to Ban Fossil Fuel Vehicles
China Dominates Global Investments in Renewable Energy
China’s Pilot Programmes Welcome Announced Launch of Emissions Trading System
Proposed Draft Legislation Clamps Down on Soil Pollution in China
Will Tougher Environmental Laws Mean Measurable Change for Pollution in China?
U.S. Withdrawal from Paris Agreement Creates an Opening for China to Lead
China One of First Countries to Sign Paris Agreement
This post was prepared with the assistance of Tegan Creedy in the London office of Latham & Watkins.
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