China’s green bond market expanded rapidly from 2016-2019, growing to the second largest green bond market globally. This report is especially relevant in light of the People’s Bank of China, China Securities Regulatory Commission, and National Development and Reform Council’s recent joint release of its draft plan on a new catalogue of eligible green projects, which will replace the previous one published in 2015. The new guidelines signal an increased commitment to improving the green bond market.
This report looks at several key factors in the market, such as:
The report finds that in general, participation in the green bond market in China is limited in its diversity. Most issuers are large entities with strong credit ratings. Nearly all investors are domestic. Though there is a lack of publicly-available reporting, proceeds from green bonds in China are largely going to environmentally-relevant projects that likely wouldn’t have occurred without the market. Cumulative impacts of these green bonds, as reported by issuers, are projects that reduced more than 52.6 million tons of CO2e and added at least 11.2 GW of installed clean energy capacity. However, there are large data gaps due to a complex regulatory framework with inconsistent guidelines.
The research also leads to several recommendations on how the market could operate more efficiently, including:
Scaling Up Green Bond Markets for Sustainable Development: A strategic guide for the public sector to stimulate private sector market development for green bonds argues that with the right support in place USD 1 trillion of green bonds could be issued a year by 2020 – providing a signifi