China’s central bank should consider carbon neutrality goals when making monetary policies, a former deputy managing director of the International Monetary Fund has said today.
Speaking at the New Financial Forum in Beijing on Sunday, Zhu Min advised the Bank to add carbon neutrality to its monetary goals’ third pillar – which also includes price stability and supporting economic growth.
“China’s financial industry must fully realise the strategic significance of carbon neutrality, the possible financial risks of carbon-neutral transformation and the financial opportunities of carbon-neutrality,” Zhu said, according to local media Securities Times.
While the Bank is yet to take into account the fiscal realities of its net zero pathway, it has been working towards ‘greener’ policies.
The People’s Bank of China in November announced in November that it would offer cheap loans to green energy, energy saving and environmental sectors, as it seeks to become carbon neutral by 2060.
The central bank has set up a $31bn special relending facility for its so-called “clean use of coal”, which will be used to improve the efficiency of mining and processing of the fossil fuel, after it refused to dial back on its immediate use at COP26.
The Bank has also halted its finance for new coal mining and coal power projects overseas from October, as it aims for corporate green loans to make up 10 per cent of its lending by 2025.