促进中欧绿色与可持续金融合作.docx

oipiiSIPRI Policy BriefFebruary 2021PROMOTING CHINA- EUROPEAN UNION COOPERATION ON GREEN AND SUSTAINABLE FINANCEIAN ANTHONy, j INgDONg yUAN AND SUN XIASUMMARYw Energy transition is an essential element of the global effort to meet the objectives set out in the 2016 Paris Agreement on climate change.China and the European Union (EU) have agreed to work together to help deliver the financing needed to achieve energy transition, but more is needed.To promote China-EU cooperation, this SIPRI Policy Brief recommends: (a) exploring a dedicated China-EU green finance initiative; (&) presenting a joint China-EU proposal on clear definitions and standards of sustainable green financing to the International Partnership on Sustainable Finance; (c) generating a joint curriculum to trainsta仔in multilateral development banks, private investment banks, insurance companies and green banks; (d) pursuing joint finance for projects that find private capital difficult to attract; and (e) deploying independent evaluation teams to scrutinize how rating systems are applied in energy transition projects.Energy transition is an essential element of the global effort to meet the objectives set out in the 2016 Paris Agreement on climate change. According to the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA), limiting the global mean temperature rise to below 2 is only possible with 'an energy transition of exceptional scope, depth and speed?A global energy transition of this scale requires more finance, and that finance must be better targeted and must draw on public and private sources. The shortfall in investment in future energy projects is estimated at $20 trillion (16.5 trillion) between 2020 and 2050. Furthermore, not all of the $75 trillion (62 trillion) already allocated is adapted to achieve energy transition. Organisation for Economic Co-operation and Development (OECD), International Energy Agency (IEA) and International Renewable Energy Agency (I RENA), Perspectives for the Energy Transition: Investment Needs for a Low-Carbon Energy System (OECD/IEAand IRENA: Paris, 2cH7). The cost estimates are taken from Most spending will be in China, the United States and countries in Europewhich are among the top carbon emitters globallybut the global energy system will have to be transformed alongside domestic and regional efforts.This SIPRI Policy Brief outlines how China and the EU can meet their responsibility to scale-up, mobilize and direct the finance needed to transition to low-carbon solutions. It focuses on the incentives and disincentives that regulators in China and in the EU are creating in their respective jurisdictions and the measures that might be available to close differences in approach in order to boost investment to the necessary levels.In 2020 China made a commitment to reach climate neutrality by 2060, but at the 2021 World Economic Forum, Chinese President Xi Jinping noted that this will require tremendous hard work.Press, E. et al., Transforming the Energy System: And Holding the Line on the Rise of Global The European Union (EU) plans to become carbon neutral by 2050. The European Green Deal, the set of policy initiatives at the heart of achieving this goal, includes transition to a clean, affordable and secure energy system as a key element.Temperatures (IRENA: Abu Dhabi, 2019).3 Xi Jinping, President of the People's Republic of China,'Let the torch of multilateralism light up humanity's way forward', Special Address at the World Economic Forum, 25 Jan. 2021.4 European Commission, "The European Green Deal； Communication from theThe global Covid-19 pandemic seems to have accelerated energy transition planning. For example, the EU has ring-fenced 30 per cent of its 1.8 trillion post-Covid-19 economic recovery funds for projects that meet criteria established for sustainable investment, including 225 billion focused on energy transition.5 Public funds are needed to support important initiatives that find it hard to attract private capital such as energy efficiency projects and the development of sources of renewable energy based on technologies that are not yet mature. Meanwhile, the volume of private investment into renewable energy projects, which far outweighs public sector spending every year, accelerated in 2020.6 The growth in net inflows into sustainable investment suggests that the financial sector expects companies that demonstrate the sustainability of their activities to outperform the market.7 However, the requirements of energy transition are enormous, and anticipated investment is not sufficient.When the People's Bank of China (PBOC) and the European Commission were among the co-founders of the International Platform on Sustainable Finance (IPSF) in October 2019, China andCommission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2O19)640 final, 11 Dec. 2019.5 European Commission, 'EU's next longterm budget & NextGenerationEU: Key facts and figures', Fact sheet, 11 Nov. 2020.6 Morningstar,'ESG fund assets recover strongly, hitting USD1 trillion mark in Q2 2020', July 2020； and Climate Policy Initiative (CPI) and IRENA, Global Landscape of Renewable Energy Finance2020 (IRENA: Abu Dhabi, 2020).7 Tett, G., "Ethical investing has reached a tipping point； Financial Times, 18 June 2019.the EU agreed to work together to help deliver the financing needed to achieve energy transition.8The regulatory framework for sustainable finance was included in the European Commission proposal for transatlantic cooperation following the victory of Joe Biden in the 2020 US presidential election.9 Biden's newly appointed special envoy for climate, John Kerry, has emphasized that one priority is to "unlock new sources of sustainable finance to green capital markets5.10 To achieve this, the new US administration intends to promote close collaboration between the public and private sectors and with other countries. Kerry has emphasized that cooperation with China on climate-related policies should be seen as a <standalone, issue protected from the friction that exists in the wider China-USA relationship.11 It now seems possible that proposals for action submitted for the 26th United Nations Climate Change Conference (scheduled for November 2021) maybe based on China-EU-USA dialogue.VARYING APPROACHES TO FINANCING PRINCIPLESCompatible China-EU approaches to domestic and external financing could add momentum to the global8 International Platform on Sustainable Finance (IPSF), Annual report, 16 Oct. 2020.9 European Commission and High Representative of the Union for Foreign Affairs and Security Policy, 4A new EU-US agenda for global change5, Joint Communication to the European Parliament, the European Council and the Council, J0IN(2020)22 final, 2 Dec. 2020.1° John Kerry, Special Presidential Envoy for Climate, 'Remarks at the Keynote Session of B20 2021 Inception Meeting5,21 Jan. 2021.11 White House, Press Briefing by Press Secretary Jen Psaki, Special Presidential Envoy for Climate John Kerry and National Climate Advisor Gina McCarthy, 27 Jan. 2021.transition to low-carbon energy systems. However, China and the EU differ over how to describe the energy transition, which principles should guide investment and how to measure progress.China's approachChina promotes green investment principles that focus on reducing emissions but within what President Xi has called an open world economy that discards "discriminatory and exclusionary standards, rules and systems?2 . China has been working to establish a green financial system for roughly a decade. In 2012 the China Banking Regulatory Commission issued green credit guidelines. Xi (note 3).China promotes green investment principles that focus on reducing emissions but within what President Xi has called an open world economy that discards "discriminatory and exclusionary standards, rules and systems?2 . China has been working to establish a green financial system for roughly a decade. In 2012 the China Banking Regulatory Commission issued green credit guidelines. Xi (note 3). 13 China Banking Regulatory Commission, "Notice of the CBRC on issuing the Green Credit Guidelines', 24 Feb. 2012. In 2015 the PBOC issued a report by its Green Finance Task Force that emphasized the urgent need for China to transition to a green and sustainable development model and recommended the establishment of a green finance system with specialized investment institutions, fiscal and financial policy support, and financial and legal infrastructures. Establishing China's Green Financial In August 2016 the PBOC and six other government agencies jointly issued guidelines for establishing the green financial system.System: Report ofThe Green Finance Task In May 2020 the PBOC further proposed that clean coal would no longer be eligible for green bond financing.Force (People's Bank of China (PBOC)/United Nations Environment Programme (UNEP):In addition, the PBOC has indicated that it will review banks' performance in the green finance sector (as a share of their total business mix) on a quarterly basis.Beijing and Geneva, 2015).Proposals for action at the 26th UN Climate Change Conference may be based on China-EU-USA dialogueThe development of green finance in China has also been reflected in external partnerships. In 2017 the PBOC was a co-founder of the Network for Greening the Financial System (NGFS),15 PBOC, "The People's Bank of China and By the end of April 2019, the number of NGFS members had increased from 8 to over 80, including the central banks and regulators of many countries participating in the Belt and Road Initiative (BRI).six other agenciesjointly issue ("guidelines for In April 2019 Chinese and international partners officially launched the BRI Internationa Green Development Coalition (BRIGC) at the second Belt and Road Forum for International Cooperation.establishing the green financial system"； 1 Sep. 2016.In 2017 the Belt and Road Ecological and Environmental Cooperation Plan and the associated Guidance on Promoting a Green Belt and Road were promoted at the first Belt and Road Forum and adopted by 27 countries.16 Yamaguchi, Y. and Ahmad, R.,'Investors applaud China's plan to ban clean coal from China's success in bringing its population out of poverty has made it sensitivegreen bond financing； S&P Global Market Intelligence, 9 Sep. 2020.17 Bloomberg News, "China plans quarterly look into banks' green finance performance', 21 July 2020.18 Banque de France, "Joint statement by the founding members of the Central Banks and Supervisors Network for Greening the Financial System: One Planet Summit, Press release, Paris, 12 Dec. 2017.19 PBOC,' Building a green belt and road with green finance； 26 Apr. 2019.20 BRI International Green Development Coalition,'Green development guidance for BRI projects baseline study report5,2020 Policy Study Series, Dec. 2020.21 Chinese Ministry of Finance, "Guiding principles on financing the development of the Belt and Road5,16 May 2017.to poverty reduction, employment stability and rapid industrialization in partner countries. These priorities are reflected in the guidance documents. However, while the guidance emphasizes respecting the existing international obligations of partners when making investment decisions, it does not promote new ones.The European Union's approachThe EU has promoted sustainable investment principles as a condition for trade, investment and technology exchanges. Senior officials have stressed that "human rights and fundamental freedoms are non-negotiable? and that promotion of the principles that the EU seesThe EU will continue to design new tools to benchmark projects against criteria based on democratic governance and respect for human rightsas standards is an essential element of policy. Von der Leyen, U., President of the By making financing conditional on respect for standards on governanceand human rightsthat are determined in Europe, the EU is sometimes accused of using financial instruments to reduce the political control of sovereign states over their own development path.The EU will continue to design new tools to benchmark projects against criteria based on democratic governance and respect for human rights. It is also currently exploring how to take account ofhuman rights in business decisions by introducing the 2018 Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct into EU practiceeither as a voluntarycode of conduct for business or in legislation.European Commission, Statement by President von der Leyen at the joint press conference withcode of conduct for business or in legislation.European Commission, Statement by President von der Leyen at the joint press conference withThe EU is regrouping, rescaling and combining financial instruments in its new financial framework for 2021-27, to better tailor them to the UN 2030 Agenda for Sustainable Development. The changes have been made in a framework that treats the internal and external dimensions of the European Green Deal in an integrated way. A quarter of the finance for distribution by the European Commission under the newly unified Neighbourhood, Development and International Cooperation Instrument is thus earmarked for action supporting climate objectives.President Michel, following the EU-China Summit videoconference, 22 June 2020.In summary, if the different approaches to finance promoted by China and the EU spread through their respective regional arrangements and partnership frameworks, it may make international coherence harder.DEVELOPING FINANCIAL INSTRUMENTS TO PROMOTE INVESTMENTThe scale of demand for energy transition has encouraged financial markets to develop products and services to channel investment. Investment banks and financial services have increased their knowledge about energy systems, how they work and how they are transforming. Multilateral development banks, which have long experience with sustainable23 Krajewski, M. et al., Human Rights Due Diligence Legislation: Options for theEU, Policy paper (European Parliament: Brussels, June 2020).24 Montesi, C./The external dimension of the Green Deal； European Commission, International Cooperation and Development, 8 Apr. 2020.development projects, are also increasing their understanding. Insurance companies have learned more about how to price risk for energy transition projects.Green financingIn the global financial sector, innovation is responding to the expanding demand for sustainable projects. Green and sustainable financing must make a wide range of projects 'bankable5 and this does not apply only to large-scale projec