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rights and responsibilities to the local governments and only give the
latter financial support and subsidy to the extent corresponding to
the level of benefit being accrued to the whole country. In view of the
financial strength of the governments at various levels, we propose
that, between the central and local governments, we must moderately
increase the rights and responsibilities of the central government in the
low carbon or environmental protection affairs, and that, between the
local governments at various levels, we must gradually increase the
rights and responsibilities of the provincial and municipal governments
and constantly reduce the obviously excessive burden on the county
and township governments.
2.4 Financial Instruments for Urban Low Carbon
Financing
Apart from the fiscal policies, financial instruments are also key policy
means of the local governments in low carbon financing. According
to the types and nature of the financial instruments and in reference
with the existing international cases, this section discusses how local
governments reform and innovate with the help of existing financial
instruments to enhance their ability to finance low carbon economy
and expand their channels of financing in this respect. Table 2.7
summarizes all the key financial policy means analysed in this section.
2.4.1 Innovated Public Fund Direction Instrument
In the low carbon growth of a city, public funds may play a crucial
leading role. First, it can effectively serve as a stable source of funds
for projects in the low carbon economy. Second, it can further guide
more private funds into the sector. The direction of the public fund
can find its expression in policy funds, the green direction funds of
the local governments, the fiscally supported guarantee funds, public–
private cooperation, etc. Moreover, with proper guidance of public
policies, the public fund can effectively enhance the enthusiasm and
direction of the private grant. This section will introduce these public-
fund-directed financing models one by one, and in view of the local
governments’ needs in financing, discuss the feasibility of the public
fund direction instrument in providing additional funds for the local
governments in their low carbon financing efforts.
96 Low Carbon Development in China and India
latter financial support and subsidy to the extent corresponding to
the level of benefit being accrued to the whole country. In view of the
financial strength of the governments at various levels, we propose
that, between the central and local governments, we must moderately
increase the rights and responsibilities of the central government in the
low carbon or environmental protection affairs, and that, between the
local governments at various levels, we must gradually increase the
rights and responsibilities of the provincial and municipal governments
and constantly reduce the obviously excessive burden on the county
and township governments.
2.4 Financial Instruments for Urban Low Carbon
Financing
Apart from the fiscal policies, financial instruments are also key policy
means of the local governments in low carbon financing. According
to the types and nature of the financial instruments and in reference
with the existing international cases, this section discusses how local
governments reform and innovate with the help of existing financial
instruments to enhance their ability to finance low carbon economy
and expand their channels of financing in this respect. Table 2.7
summarizes all the key financial policy means analysed in this section.
2.4.1 Innovated Public Fund Direction Instrument
In the low carbon growth of a city, public funds may play a crucial
leading role. First, it can effectively serve as a stable source of funds
for projects in the low carbon economy. Second, it can further guide
more private funds into the sector. The direction of the public fund
can find its expression in policy funds, the green direction funds of
the local governments, the fiscally supported guarantee funds, public–
private cooperation, etc. Moreover, with proper guidance of public
policies, the public fund can effectively enhance the enthusiasm and
direction of the private grant. This section will introduce these public-
fund-directed financing models one by one, and in view of the local
governments’ needs in financing, discuss the feasibility of the public
fund direction instrument in providing additional funds for the local
governments in their low carbon financing efforts.
96 Low Carbon Development in China and India
