Chinese central bank needs carbon targets in new policies, ex-IMF chief says

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Sunday, January 09, 2022 10:57 a.m.

Chinese street vendors sell vegetables at a local market outside a state-owned coal-fired power plant, near the site of a large floating solar farm project (Photo by Kevin Frayer / Getty Images)

China’s central bank should take carbon neutrality goals into account when shaping its monetary policies, a former deputy managing director of the International Monetary Fund said today.

Speaking at the new Beijing financial forum on Sunday, Zhu Min advised the bank to add carbon neutrality to the third pillar of its monetary goals, which also includes price stability and supporting economic growth.

“The Chinese financial industry must fully understand the strategic importance of carbon neutrality, the possible financial risks of a carbon neutral transformation and the financial opportunities of carbon neutrality,” Zhu said, according to local media outlet Securities Times.

Although the Bank has not yet taken into account the fiscal realities of its net zero trajectory, it has made efforts to put in place “greener” policies.

The People’s Bank of China announced in November that it would offer cheap loans to the green energy, energy conservation and environment sectors as it seeks to become carbon neutral by 2060.

The central bank has set up a special $ 31 billion repayment facility for its so-called “clean use of coal,” which will be used to improve the efficiency of fossil fuel extraction and processing, after refused to reverse his immediate decision. use at COP26.

The Bank also halted funding for new overseas coal and coal-fired power projects from October, as it aims for green business loans to account for 10% of its lending. by 2025.


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