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financial instruments on the basis of scale effect, technology effect, 2.2
and substitution effect, and analyses, one by one, the feasibility of
financing instruments for developing low carbon economy in cities
based on relevant international experience. Foreign enterprises and
direct investment of enterprises are excluded in this research, for we
believe they are up to the policy signals sent by the central and local
governments, and thus are not entirely financing instruments for low
carbon economy.
Table 2.1 Summary of Financing Means for Local Governments to Develop Low carbon
Economy
Effect Form Content/Case
Scale effect Directly provide extra financial sources The improvement of existing policies
concerning taxation, fees, and
financing means and policy innovation
Technology Improve the existing fund use and Strengthen the management of existing
effect management mode special funds for low carbon economy;
reform the transfer payment mode
Structure or The private sector invests in relevant CDM or voluntary emission reduction
substitution low carbon economic sectors to save programme; enterprises are more active
effect government expenditure which can be used in emission reduction in the carbon
in other low carbon economic sectors trading market
2.2 The Challenge of Budget Increase for Cities in
Response to Climate Change
Developing a low carbon economy will not only ensure energy
conservation and emission reduction in cities, strengthen their
ability to adapt to climate change and extreme weather, but also
promote sustainable development of cities and maintain their lasting
competitiveness and appeal. More and more cities are actively
developing a low carbon economy, which will surely raise more
demands on expenditure. Infrastructure mainly involves sectors of
transport (highway and railway), telecommunications, energy and
power, and water treatment and supply. The International Energy
Agency (IEA) predicts that to provide for universal modern energy
access by 2030, a cumulative investment of USD 1 trillion is required,
with an annual average of USD 48 billion (IEA 2011).
Effective, convenient, and diversified financing for low carbon
economy is the key to ensuring the low carbon development and
transformation of cities. However, cities vary in emission reduction,
development phase, economic structure and scale, comparative
advantages, and development trends; therefore, the challenge of
Chapter 2 Innovative Financing for Low Carbon Development 75
and substitution effect, and analyses, one by one, the feasibility of
financing instruments for developing low carbon economy in cities
based on relevant international experience. Foreign enterprises and
direct investment of enterprises are excluded in this research, for we
believe they are up to the policy signals sent by the central and local
governments, and thus are not entirely financing instruments for low
carbon economy.
Table 2.1 Summary of Financing Means for Local Governments to Develop Low carbon
Economy
Effect Form Content/Case
Scale effect Directly provide extra financial sources The improvement of existing policies
concerning taxation, fees, and
financing means and policy innovation
Technology Improve the existing fund use and Strengthen the management of existing
effect management mode special funds for low carbon economy;
reform the transfer payment mode
Structure or The private sector invests in relevant CDM or voluntary emission reduction
substitution low carbon economic sectors to save programme; enterprises are more active
effect government expenditure which can be used in emission reduction in the carbon
in other low carbon economic sectors trading market
2.2 The Challenge of Budget Increase for Cities in
Response to Climate Change
Developing a low carbon economy will not only ensure energy
conservation and emission reduction in cities, strengthen their
ability to adapt to climate change and extreme weather, but also
promote sustainable development of cities and maintain their lasting
competitiveness and appeal. More and more cities are actively
developing a low carbon economy, which will surely raise more
demands on expenditure. Infrastructure mainly involves sectors of
transport (highway and railway), telecommunications, energy and
power, and water treatment and supply. The International Energy
Agency (IEA) predicts that to provide for universal modern energy
access by 2030, a cumulative investment of USD 1 trillion is required,
with an annual average of USD 48 billion (IEA 2011).
Effective, convenient, and diversified financing for low carbon
economy is the key to ensuring the low carbon development and
transformation of cities. However, cities vary in emission reduction,
development phase, economic structure and scale, comparative
advantages, and development trends; therefore, the challenge of
Chapter 2 Innovative Financing for Low Carbon Development 75
