UNEP and China’s central bank meet to address sustainable development

The head of the United Nations Environment Programme (UNEP) and the Deputy Governor of China's central bank met on Wednesday to progress the green economy in China and boost the country’s participation in the U.N. climate process.

The discussions between Achim Steiner (pictured), the Under-Secretary General of the U.N. and Executive Director of UNEP, and Gongsheng of the People's Bank of China (PBC) focussed on greening China's rapidly developing financial and capital markets.

UNEP and the PBC published a ground-breaking report earlier this year that sets out an ambitious set of practical steps towards to establish sustainable and environmentally friendly market mechanisms.

The "Establishing China's Green Financial System" report was produced by the special Green Finance Task Force, co-Convened by the Research Bureau of the PBC and UNEP's Inquiry into the Design of a Sustainable Financial System ('UNEP Inquiry').

It contains policy, regulatory and market innovations that would better align China's financial system with the requirements of a sustainable development.

The report estimates that under the 13th Five-Year Plan China will need to invest at least RMB2 trillion (US$320 billion) per year in green sectors in order to meet the targets announced by its Ministry of Environment.

Public resources can cover only 15 per cent of that amount, making a stronger involvement of the financial system crucial.

In recent years China has made significant progress in greening its economy. For example, its renewable energy investment amounted to US $83.3 billion in 2014 - exceeding the renewable energy investment made by Europe or the US for that year.

At the same time, over 2.64 million jobs were created in the sector in 2013 and 36 million people acquired access to electricity through off-grid sources between 1998 and 2012.

Launched by UNEP in early 2014, the international Inquiry into the Design of a Sustainable Financial System aims to identify the factors that are preventing the flow of funds from the global financial system into sustainable technologies and products, and to formulate recommendations for framework conditions that would enable the alignment of the aims of the green economy with those of the financial system.