An April 2022 Intergovernmental Panel on Climate
Change report found that the global community
is on a pathway to global warming of more than
double the 1.5°C (or 2.7° Fahrenheit) limit agreed
upon in Paris in 2015. The report underscores
the urgency with which private and public sector
leaders must act, and China – currently the world’s
largest carbon emitter – has made an ambitious
pledge to achieve carbon peak by 2030 and
carbon neutrality by 2050.
Fulfilling this commitment will require an
enormous amount of financing – about CNY
140 trillion (Chinese yuan renminbi) ($22 trillion)
in total for the 2020-2060 period across the
electricity, steel, mobility, and construction
and real estate industries alone. These are also
heavily polluting industries that are particularly
hard to transition and require the application
of innovative, new technologies that are early-
stage, capital-intense and risky. Public and
private stakeholders, both from carbon-intense
industries and the financial services community,
need to create new financing models to develop,
test and scale these technologies.
To facilitate this process, the World Economic
Forum, in collaboration with Oliver Wyman, is
engaging global industry leaders in the Financing
the Transition to a Net-Zero Future initiative. In
October 2021 – and in time for the 26th United
Nations (UN) Climate Change Conference of the
Parties (COP26) – initiative members published
an insight report presenting initial findings from
these global discussions. Building on this work and
recognizing China’s significance in accelerating
capital mobilization towards these early-stage
decarbonization technologies, the Forum and
Oliver Wyman convened a group of Chinese
industry leaders and experts in early 2022 to
explore how challenges and opportunities in China
align with or differ from global dynamics. Through
numerous workshops and expert interviews,
more than 50 industry and public sector leaders
contributed insights and observations and posed
yet-to-be-solved questions that are presented in
this insight report.
China holds a critical and outsized role in helping
the global community achieve the targets
of the Paris Agreement and preserving the
planet’s biosphere. At the same time, China’s
available financing mechanisms and its financial
system remain somewhat distinct. A nuanced
understanding of prioritized net-zero technologies
and potential pathways to financing these
technologies in Greater China is therefore critical
to ensure the country can achieve its net-zero
ambitions. This publication seeks to help in turning
these ambitions into realities, show the enormous
opportunities China holds for contributing to the
global carbon-neutrality agenda and also highlight
remaining challenges.
We welcome your feedback on the ideas
presented in this insight report and encourage you
to become part of this important work facilitated by
the World Economic Forum through the Shaping
the Future of Financial and Monetary Systems
Platform and the Mission Possible Platform.
Foreword
China holds immense opportunities
to realize net-zero ambitions and
global environmental change.
Jason Ekberg
Partner, Corporate and
Institutional Banking Practice,
Oliver Wyman
Kai Keller
Platform Curator, The Future
of Financial Services in China,
World Economic Forum
China’s Climate Challenge:
Financing the Transition to Net Zero
China’s Climate Challenge: Financing the Transition to Net Zero 3
