Exclusive: China to Roll Out New Lending Tool to Support Green Push
What’s new: The State Council, China’s cabinet, proposed to set up monetary policy instruments to support carbon emissions reduction, a step toward the rollout of new financial tools to serve the country’s ambitious climate goals.
Caixin learned that the new tool will take the form of relending quotas with preferential rates issued to qualified financial institutions to encourage their funding for clean energy and carbon reduction-related projects.
The cabinet pledged at a meeting Wednesday to adopt new policy tools to provide steady and targeted support to the country’s green transformation and encourage social capital to take part.
Why it matters: The planned relending tool will be the first of its kind created by the central bank to support green projects, although smaller pilot tests have been launched at local levels.
The rollout of supportive policy instruments for carbon reduction is among the central government’s top agenda items for this year. The central bank has sent signals on different occasions about the initiative.
China has stepped up policy arrangements to help reach its goals to bring carbon emissions to a peak by 2030 and achieve net-zero emissions by 2060. Reducing emissions of carbon dioxide, a principal greenhouse gas, is a key to fighting climate change.
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