China news agency, Shanghai, September 24 (Gao Zhiming) Under the background of sustainable development, green has become the "background color" pursued by the development of various industries, and concepts such as green finance and transitional finance have emerged. How can finance help solve the "pain of transformation" in economic development?
At the 5th Bund Financial Summit held in Shanghai from 22nd to 24th, transitional finance received attention. Experts generally believe that finance should not only focus on "pure green" or close to "pure green" economic activities, but also encourage the development of transitional finance.
The recently released "Research on the Development of Transitional Finance in China" shows that the concept of transitional finance was first put forward by the Organization for Economic Cooperation and Development (OECD) in 2019, which refers to financial activities that support the transformation of economic entities to the 17 sustainable development goals of the United Nations. Broadly speaking, transitional finance should not only include financial support for the economic transformation to a green and low-carbon goal, but also include the financial system’s active transformation and adjustment to adapt to the economic transformation.
Xu Lin, chairman of China-US Green Fund, said that transitional finance is very important for the development of China. The technological progress in the field of new energy has made people see that investing in green finance is profitable and has little risk. However, the transformation of traditional industrial sectors such as coal-fired power generation, chemical industry, metallurgy and building materials has actually encountered greater difficulties, including cost increase.
Ma Jun, president of Beijing Institute of Green Finance and Sustainable Development, also pointed out that there may be some difficulties and pain points in the development of transitional finance. In China, the criteria for defining economic activities in transition are displayed in the form of a catalogue, but there may be some risks of "false transition" if only the catalogue is used, and the catalogue must be used in combination with other conditions.
He also pointed out that at the product level, there are many debt-based transformation financing tools, such as bonds and loans linked to sustainability, but basically no equity financing tools supporting transformation have been seen; In terms of incentive mechanism, what is needed is not only the conceptual incentive mechanism, but also the specific tools to be used. In terms of fair transformation, it also faces challenges at the landing level.
Financial support for green and low-carbon transformation must be achieved through various effective policy tools. Relevant experts attending the meeting said that policy tools can be divided into two categories: price-based and non-price-based Price tools price negative externalities or subsidize positive externalities to enhance the relative competitiveness of green projects; Non-price tools mainly form incentives and constraints on market players to promote their behavior to meet the requirements of green and low-carbon development.
It is understood that since 2021, based on the Catalogue of Projects Supported by Green Bonds, the People’s Bank of China has absorbed the consensus of international transitional financial standards, and given consideration to its own reality, determined the principles of remarkable contribution, advancement, consistency, continuous supervision, simplicity and feasibility, and dynamics of transitional financial standards, and formed the first drafts of standards for four industries: coal, electricity, steel, building materials and agriculture.
Talking about the future of transitional finance, Xu Lin suggested providing better and more specific policy support for the research and development and application of green and low-carbon technologies; At the same time, design a better incentive mechanism; In addition, the regulatory rules should also be adjusted adaptively. Transitional finance needs to be gradually refined in the specific practice process and constantly improve the ecological construction of transitional finance. (End)