Page 158 - Low Carbon Development in China and India
P. 158
As the basic beneficiary of these sectors is the local government and 2.2
all these sectors constitute the main departments for developing low
carbon economy, improving the inflow of international capital is
an important aspect for local governments to facilitate low carbon
economy financing.
However, at the same time, the outbreak of the American subprime
mortgage crisis and the European sovereign debt crisis in 2008 and
2010 caused the European and American countries to implement fiscal
tightening measures. The world economy is slowly picking up, which
has directly affected the implementation of transfer climate capital to
developing countries. Meanwhile, in recent years, with the growth
of China’s economic strength, developed countries are less willing
to offer funds for China’s development and many countries have
announced cutting of funds for assisting China’s development, which
would surely affect the supply of international climate funds. How to
improve capital utilization efficiency within the limited capital supply
is also an important factor for local governments to consider for low
carbon development financing.
2.5.1 Key Institutions Providing Financial and Technical
Support
Effective international funds that facilitate local governments to
develop low carbon economy financing are mainly from multilateral
and bilateral institutions. This section will briefly summarize some of
the international institutions that have closely cooperated with China.
Bilateral Financial Institutions and Bilateral Banks
Bilateral financial institutions (BFIs) refer to institutions, founded and
led by a government. They offer assistance to developing countries
or emerging markets or invest in development programmes or plans.
They mainly include bilateral development agencies, bilateral banks,
bilateral climate funds, and export credit agencies. BFIs are the most
important media for transferring international public climate funds
and 25 per cent of the world climate capital in 2010 was transferred by
BFIs (UNEP 2011). According to the OECD database, from 2006 to 2009,
about 18 OECD members had provided financial support to China in
the relevant climate change sector by the bilateral channel, accounting
for 78 per cent of OECD members providing assistance for China’s
development. In China, the active bilateral development agencies/
bilateral banks include the French Development Agency (AFD), the
Kreditanstaltfür Wiederaufbau (KfW), the Japanese International
Chapter 2 Innovative Financing for Low Carbon Development 123
all these sectors constitute the main departments for developing low
carbon economy, improving the inflow of international capital is
an important aspect for local governments to facilitate low carbon
economy financing.
However, at the same time, the outbreak of the American subprime
mortgage crisis and the European sovereign debt crisis in 2008 and
2010 caused the European and American countries to implement fiscal
tightening measures. The world economy is slowly picking up, which
has directly affected the implementation of transfer climate capital to
developing countries. Meanwhile, in recent years, with the growth
of China’s economic strength, developed countries are less willing
to offer funds for China’s development and many countries have
announced cutting of funds for assisting China’s development, which
would surely affect the supply of international climate funds. How to
improve capital utilization efficiency within the limited capital supply
is also an important factor for local governments to consider for low
carbon development financing.
2.5.1 Key Institutions Providing Financial and Technical
Support
Effective international funds that facilitate local governments to
develop low carbon economy financing are mainly from multilateral
and bilateral institutions. This section will briefly summarize some of
the international institutions that have closely cooperated with China.
Bilateral Financial Institutions and Bilateral Banks
Bilateral financial institutions (BFIs) refer to institutions, founded and
led by a government. They offer assistance to developing countries
or emerging markets or invest in development programmes or plans.
They mainly include bilateral development agencies, bilateral banks,
bilateral climate funds, and export credit agencies. BFIs are the most
important media for transferring international public climate funds
and 25 per cent of the world climate capital in 2010 was transferred by
BFIs (UNEP 2011). According to the OECD database, from 2006 to 2009,
about 18 OECD members had provided financial support to China in
the relevant climate change sector by the bilateral channel, accounting
for 78 per cent of OECD members providing assistance for China’s
development. In China, the active bilateral development agencies/
bilateral banks include the French Development Agency (AFD), the
Kreditanstaltfür Wiederaufbau (KfW), the Japanese International
Chapter 2 Innovative Financing for Low Carbon Development 123
