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• Governments, central banks, and financial institutions can take various measures to participate in green finance recovery during COVID-19.
• How can donors contribute to green finance projects?
• Read more about green finance with this breakdown.
Governments, central banks and financial institutions each have a role to play in ensuring that massive stimulus packages rolled out to revive Covid 19-stricken economies are channeled into green projects, said finance and responsible investing experts.
Because the carbon and environmental footprint of many investments, especially infrastructure projects, will be locked in for the next few decades, it is important they are designed to be low-carbon from the start, said Dr Ma Jun, director of Tsinghua University’s research centre for green finance development in China.
In a keynote address at the recent United Nations Virtual Forum on Responsible Business and Human Rights, Ma noted that a significant amount of government spending is to stimulate consumption—dishing out coupons to consumers to spend on goods and services, for instance.
To ensure the money is spent on greener products such as electric vehicles and energy-efficient refrigerators and air-conditioners, central and local governments could draw up a list of goods and services to subsidise, he said at a session titled Ensuring a Sustainable Recovery: What Role for the Finance Sector?
Governments should also be transparent with how the stimulus packages are being spent, so that the public is able to monitor its actions, he said.
Central banks and financial regulators, meanwhile, should enhance environmental and climate disclosure requirements, said Ma, who is also special advisor to the United Nations Environment Programme and former chief economist at the research bureau of China’s central bank, the People’s Bank of China.
Read the full article about green finance by Neo Chai Chin at Eco-Business.