Xinhua Insight: China growing green economy under new climate pledges

It's hard to imagine that China, the world's largest greenhouse gas emitter, could one day lead the world in going green, but the country is nurturing a new competitive edge through environmentally friendly growth.

China submitted a plan with ambitious goals to reduce carbon emissions and develop a green economy to the Secretariat of the UN Framework Convention on Climate Change on Tuesday, underscoring that going green will be a new focus for China as its economy plateaus.

From financial policies supporting green development to growing green businesses and promotion of less polluting lifestyles, the Chinese economy is gaining new momentum from stimulus measures based on environmental concerns.

GREEN FINANCING

China is aiming to effectively curb carbon dioxide emissions by 2030, when it will have cut such emissions per unit of GDP by 60 to 65 percent from 2005 levels, according to Tuesday's plan, titled "Intended Nationally Determined Contributions (INDC)".

Capital is crucial to meeting the targets, and China is working on channeling more money into environmentally friendly projects.

A financial system will be built to channel funding through loans, private equity, bonds, securities and insurance to the green industry,agreed senior Chinese officials at a summit in southwest China's Guizhou Province last week.

"A financial mechanism is the decisive top-down design for green growth. It might be difficult to invest in a green manner at the beginning, but it pays in the long run," said Ma Jun, chief economist with the research bureau under China's central bank.

Chinese banks have been lending more to the green sector. Loans to low-carbon projects reached 7.59 trillion yuan (1.24 trillion U.S. dollars) at the end of 2014, according to the China Banking Association.

"Green finance only accounts for about 2 percent of the world's total investment, but it has certainly helped many countries adjust their economic models," Ma said, pointing to China's potential in this area.

RISING GREEN SECTOR

From non-fossil energy plants to new energy cars, green industries are enjoying a boom, with financial support encouraging environmentally friendly and energy-efficient projects.

It is estimated that the energy conservation and environment protection sectors will amount for about 2 percent of this year's GDP, while the share for the added value of emerging new energy sectors might stand at 8 percent.

China plans to increase its installed capacity of wind power and solar power to 200 gigawatts (GW) and around 100 GW by 2020, about 180 times and 1,600 times that for 2005 respectively, according to the INDC plan.

Meanwhile, the Chinese government highlighted green development as a key principle in its "Made in China 2025" plan to upgrade the country's manufacturing.

China is expected to invest over 2 trillion yuan in green industries the next five years. Only about 10 to 15 percent of that capital will come from the government.

"With the INDC plan and support policies to encourage private investment, the government is sending out a clear message that a low-carbon economy is the direction for industrial development," said Gao Feng, Chinese foreign ministry's special representative for climate change negotiations.

SUSTAINABLE CONSUMERISM

Under frequently smoggy skies, the growing Chinese middle class are increasingly aware of the importance of living a green lifestyle.

In the first quarter, sales of new energy cars grew almost threefold year on year, according to the commerce ministry.

"Chinese consumers are aware that going green is not just the business of government and enterprises. They are also a key stakeholder and can do their part by adopting a green way of life -- living more, not just having more," said He Jiankun, head of Tsinghua University's Low Carbon Economy Institute.

It is not just about buying energy-efficient light bulbs or fuel-efficient cars. More and more Chinese choose public transport and take part in public activities promoting low-carbon lifestyles.

The INDC plan promised China will continue to encourage green living by enhancing education and encouraging public institutions to take the lead in promotion, while it will also ensure that public transport has a 30-percent share of all motorized travel in large and medium-sized cities by 2020.

"We should develop a different vision of prosperity that balances economic growth with a clean environment. Sustainable consumption is the new fashion," He said. Endi