Page 170 - Low Carbon Development in China and India
P. 170
payment of local governments in time and space so as to maximize 2.2
expenditure efficiency. It is suggested to pilot a joint coordination
mechanism between the Central and local government in the low
carbon sector, or transfer part of the fiscal revenue to the relevant
sectors that are good for low carbon development by setting up
special local low carbon financing funds, or establish programmes
supporting the local low carbon financing programme in existing
funds (such as the CDM Fund).
Financial instrument is also an important source for the local
government to facilitate low carbon economy financing. The specific
policies and suggestions on fully exerting the enthusiasm of financial
instruments and guiding the private investment mainly include:
• Exert the key guiding role by public funds. Some cities have
had certain practice on policy funds (such as the CDM Fund),
government investment guiding fund and fiscal support guarantee,
etc. which would be popularized in more areas in the future.
• Provide services and conveniences for local government to
develop innovative financial instruments by setting up a better
financing platform. In addition to loans, more explorations include
local government issuing low carbon bonds, carrying out public
and private cooperation programmes by urban construction
and investment companies, jointly setting up urban low carbon
investment fund through government and social capital and
providing guarantee for low carbon programme jointly financed
and invested by public and private sectors through establishing the
infrastructure credit guarantee, etc.
• The fiscal revenue from market instruments could be an important
funding source for local and central governments to develop low
carbon economy. The use of these policies always needs time to
refine and transit and would not bring outstanding fiscal revenue
at the beginning of such policy implementation. The local and
central government should negotiate revenue use of carbon
financial instruments as earlier as possible and confirm the revenue
distribution, management and use while strengthening the carbon
financial instrument pilot.
• Encouraging the innovation and application of existing financial
instruments. At present, the financial sector in China is still at
the primary stage. To stimulate the traditional financial market
to provide more funds, it must rely upon accurate investment
signals, perfect policies, improvement of vigour of various financial
Chapter 2 Innovative Financing for Low Carbon Development 135
expenditure efficiency. It is suggested to pilot a joint coordination
mechanism between the Central and local government in the low
carbon sector, or transfer part of the fiscal revenue to the relevant
sectors that are good for low carbon development by setting up
special local low carbon financing funds, or establish programmes
supporting the local low carbon financing programme in existing
funds (such as the CDM Fund).
Financial instrument is also an important source for the local
government to facilitate low carbon economy financing. The specific
policies and suggestions on fully exerting the enthusiasm of financial
instruments and guiding the private investment mainly include:
• Exert the key guiding role by public funds. Some cities have
had certain practice on policy funds (such as the CDM Fund),
government investment guiding fund and fiscal support guarantee,
etc. which would be popularized in more areas in the future.
• Provide services and conveniences for local government to
develop innovative financial instruments by setting up a better
financing platform. In addition to loans, more explorations include
local government issuing low carbon bonds, carrying out public
and private cooperation programmes by urban construction
and investment companies, jointly setting up urban low carbon
investment fund through government and social capital and
providing guarantee for low carbon programme jointly financed
and invested by public and private sectors through establishing the
infrastructure credit guarantee, etc.
• The fiscal revenue from market instruments could be an important
funding source for local and central governments to develop low
carbon economy. The use of these policies always needs time to
refine and transit and would not bring outstanding fiscal revenue
at the beginning of such policy implementation. The local and
central government should negotiate revenue use of carbon
financial instruments as earlier as possible and confirm the revenue
distribution, management and use while strengthening the carbon
financial instrument pilot.
• Encouraging the innovation and application of existing financial
instruments. At present, the financial sector in China is still at
the primary stage. To stimulate the traditional financial market
to provide more funds, it must rely upon accurate investment
signals, perfect policies, improvement of vigour of various financial
Chapter 2 Innovative Financing for Low Carbon Development 135
