Page 109 - Low Carbon Development in China and India
P. 109
Local governments normally enjoy a certain degree of discretion in areas
such as urban planning and infrastructure construction, and to some
extent, play a guiding role in the design and development of green and
low carbon cities. The development of low carbon cities mainly involves
transport, construction, energy, and waste management—the financing
for which is closely related to the financial source of local governments.
A sound financing scheme will effectively boost the growth of low
carbon economy or vice versa. As can be judged from the division of
rights and obligations between the central and local governments in
China, the latter bears quite a percentage of government expenditure.
Responding to climate change and developing low carbon economy
have brought about new challenges to the management and use of the
fiscal revenue of cities and the attraction of extra funds. These challenges
include: (i) identifying financing needs in low carbon sectors and
breaking financing bottlenecks; (ii) determining the structure and form
of financing mechanisms and providing conveniences for low carbon
financing; (iii) determining and giving full play to the roles of public—
the Central government, local governments, and the connection
between the two—and private sectors, and providing conveniences for
low carbon financing; and (iv) determining which specific policies and
conveniences the local government need to provide in order to attract
more investment in low carbon sectors.
This chapter provides an overview of the financing management
and innovation for low carbon development in cities and furthermore,
a comparatively comprehensive reference basis for future research
on specific issues. As summarized in Table 2.1, we believe that
efforts to improve the financing capacity of local governments for
the development of a low carbon economy can be done in three
respects: (i) to improve the ability to obtain extra financial sources,
that is, expanding the size of disposable funds through the scale effect;
(ii) to reform the existing fund management and use different modes
to improve fund-use efficiency, that is, realizing the same low carbon
development objective with less money through the technology effect;
and (iii) to incentivize the private sector in low carbon development
to save some public funds, that is, the substitution or structure effect.
There are only a few articles published on the research of low carbon
financing for cities. Based on the abundance of research on climate
financing, the Research Centre for Climate and Energy Finance of
CUFE have conducted a special systematic research on city financing.
This chapter not only summarizes the greening of fiscal instruments
and the reform of financial instruments, but also classifies fiscal and
74 Low Carbon Development in China and India
such as urban planning and infrastructure construction, and to some
extent, play a guiding role in the design and development of green and
low carbon cities. The development of low carbon cities mainly involves
transport, construction, energy, and waste management—the financing
for which is closely related to the financial source of local governments.
A sound financing scheme will effectively boost the growth of low
carbon economy or vice versa. As can be judged from the division of
rights and obligations between the central and local governments in
China, the latter bears quite a percentage of government expenditure.
Responding to climate change and developing low carbon economy
have brought about new challenges to the management and use of the
fiscal revenue of cities and the attraction of extra funds. These challenges
include: (i) identifying financing needs in low carbon sectors and
breaking financing bottlenecks; (ii) determining the structure and form
of financing mechanisms and providing conveniences for low carbon
financing; (iii) determining and giving full play to the roles of public—
the Central government, local governments, and the connection
between the two—and private sectors, and providing conveniences for
low carbon financing; and (iv) determining which specific policies and
conveniences the local government need to provide in order to attract
more investment in low carbon sectors.
This chapter provides an overview of the financing management
and innovation for low carbon development in cities and furthermore,
a comparatively comprehensive reference basis for future research
on specific issues. As summarized in Table 2.1, we believe that
efforts to improve the financing capacity of local governments for
the development of a low carbon economy can be done in three
respects: (i) to improve the ability to obtain extra financial sources,
that is, expanding the size of disposable funds through the scale effect;
(ii) to reform the existing fund management and use different modes
to improve fund-use efficiency, that is, realizing the same low carbon
development objective with less money through the technology effect;
and (iii) to incentivize the private sector in low carbon development
to save some public funds, that is, the substitution or structure effect.
There are only a few articles published on the research of low carbon
financing for cities. Based on the abundance of research on climate
financing, the Research Centre for Climate and Energy Finance of
CUFE have conducted a special systematic research on city financing.
This chapter not only summarizes the greening of fiscal instruments
and the reform of financial instruments, but also classifies fiscal and
74 Low Carbon Development in China and India
