A new World Bank report on China’s climate and development challenges is released this week. It states that the country requires up to $17 trillion in additional investments in green infrastructure and technology. These investments have to be in the power and transportation sectors if China wants to achieve climate goals of net-zero emissions by 2060.
According to the report, which is part of a new series of Country Climate and Development Reports, China will require private investment to cover the enormous cost and unleash the necessary innovations. China is the world’s second-largest economy currently.
Climate change poses a significant threat to China
According to the report released this Wednesday, climate change poses a significant threat to China. It particularly affects China’s densely populated and economically critical low-lying coastal cities. Thus, unabated climate change could reduce its economic output by 0.5% to 2.3% as early as 2030.
According to Manuela Ferro, the World Bank’s vice president for East Asia and the Pacific, China’s long-term growth prospects increasingly depend on rebalancing the country’s economy. She suggests that China has to make the change from infrastructure funding to innovation, from export sales to domestic consumption, and from government-led to market-driven resource allocation.
Meeting global climate goals is impossible without a transition to a low-carbon economy
The report also stated that meeting global climate goals would be impossible if China doesn’t make the transition to a low-carbon economy. The latest document notes that China emits 27% of global carbon dioxide and one-third of overall global greenhouse gasses.
According to the report, this transition will necessitate a massive shift in resources, innovation, and new technologies. It is the only way to improve energy efficiency and resource productivity.
At the same time, the report says that China could capitalize on existing advantages. Such advantages are higher returns on low-carbon technology production. Then here is a high domestic savings rate, and a leadership position in green finance.
It did, however, emphasize the importance of private-sector participation in ensuring China’s path to carbon neutrality. Also, there is a need for a more predictable regulatory environment and better access to markets and finance.