Changhua Wu: China can lead the world to that smarter, better, more prosperous future
- 31 July 2012
BEIJING: Changhua Wu, Greater China Director, The Climate Group -- and the work of our China office in driving the global clean revolution -- has been spotlighted in a newly launched digital magazine from the prestigious Xinhua News Agency.
Xinhua released its first digital, interactive e-magazine, Read China this month, which you can download from Apple’s App Store.
Our China Climate Finance Policy Design project is featured in a major section of the first issue, China Question Mark, which focuses on the Chinese economy. Here are some highlights of the interview that took place with our China Director, Changhua Wu, about the new project.
Xinhua: Why is climate finance important now?
Changhua: Climate finance, investment into global warming abatement measures and other initiatives is absolutely critical if we want to tackle climate change. One of the most important concrete achievements of the UNFCCC Conference of the Parties (COP)’s Climate talks has been the commitment to US$100 billion per year in aid to developing countries to help them mitigate the results of and adapt to global warming. The amount refers to “new and additional money”, separate to private sector investment already taking place.
The Chinese Government has already invested huge sums in areas like energy efficiency, clean tech and renewable energy with very encouraging results. A US$31 billion investment into energy conservation and emissions reduction during China’s 11th Five Year planning period (2006-2010) not only resulted in significant reduction of carbon emissions growth but also generated a total investment of US$315 billion. Thus, government investment into clean tech and renewable energy has a positive effect for the overall economy.
In spite of these steps, there is a clear consensus that this level of funding is not enough to mitigate the results of climate change, neither internationally nor in China. More climate finance funding is needed. Equally importantly, better understanding on behalf of policymakers of the nature of climate finance, capital needs, management and effective deployment, as well as assessment mechanisms, are also needed.
Xinhua: What is the purpose of the China Climate Finance Policy Design project?
Changhua: Preliminary research shows that there is limited understanding of climate finance today in China. Though Chinese negotiators attend international negotiations on climate finance, this is still regarded as essentially a new theme. Some fundamental issues have not yet been answered including how much funding is needed, sources of investment, institutional and governance arrangements, as well as the assessment mechanisms of climate finance projects.
Inadequacies in climate finance strategy and policy have become a barrier, limiting China’s efforts to allocate and leverage sufficient capital. Bottlenecks in climate finance include:
- A lack of clear climate finance governance system. While multiple government departments are involved in the management or supervision of international and domestic climate capital, there is a lack of clear responsibilities and coordination mechanisms.
- Policies are disconnected and incomplete. Although policy policies exist, there is no high-level, systematic policy design.
- A lack of assessment mechanism for policies.
- Sources and intermediaries of public funding are limited and inadequate to leverage broader financial resources.
The project is tailored to specifically overcome these barriers. We are going to work closely with China’s National Development and Reform Commission (NDRC) in increasing awareness and delivering practical policy recommendations, which will inform the long-term policy formulation process in climate finance. We aim to familiarize policy makers and other stakeholders with climate finance, come up with policy recommendations and ultimately, by late 2013, help China develop a clearly defined climate finance policy framework. It will cover all the sources for climate finance and incorporate the necessary governance and monitoring mechanisms by late 2013.
Xinhua: What is the global context for such a project from China? What is the Clean Revolution initiative?
Changhua: China is at a pivotal moment. Its low carbon achievements cannot be stressed enough. It has already made huge strides in its efforts to tap into the potential that low carbon technologies and renewable energy can offer. In 2010, the total installed wind energy capacity in China was 44.73 million kilowatts – the most in the world. China is now, by some distance, the fastest growing market in the world for renewable energy. For example, the country already exports solar panels worth US$15 billion annually.
At the same time, China needs to sustain its economic growth rates while addressing its social, financial and environmental challenges. And this has to happen amid the ongoing global economic crisis.
The ideal model for China’s future economic growth will be to decouple resource consumption and environmental impact from growth. If this does not happen, China risks slower growth rates because of the country’s negative international image, its place at the lower end of the global industrial international division and the green trade barrier. At the same time China’s investment abroad needs to be more responsible and sustainable.
In our recent report Consensus and cooperation for a Clean Revolution: China and global sustainable development, co-authored with the Chinese Academy of Sciences, we argue that China needs to place clean technology investment at the heart of its economic growth plans. The country is currently at the cusp of driving a new global ‘clean’ industrial revolution that will meet growing population and consumer growth sustainably and improve China’s international standing. At the same time China and the international community should work more closely together to drive a ‘low carbon revolution’ which will help tackle the global financial crisis by creating millions of green jobs as well as curb carbon emissions.
China and the world need a change in investment in renewable energy, clean technology and infrastructure. A ‘Clean Revolution’ is necessary to put the world on the path to a smarter, better, more prosperous world for all and help China realize its full potential while confronting its current challenges. Government and business leaders in China and all over the world are realizing this opportunity and are already leading the world into a more sustainable future. But it needs to happen faster in China and everywhere else. And China, with its rapidly increasing financial and geopolitical clout can lead the world to that smarter, better, more prosperous future.
Read the full interview by downloading the Read China PDF from Apple.