China needs up to $17 trillion in additional investments for green infrastructure and technology in the power and transport sectors to meet its goal of net-zero emissions by 2060, a World Bank report has found.
The world’s second-largest economy would need private investment to cover the immense price tag and unleash needed innovations, according to the report, which was released on Wednesday.
Chinese President Xi Jinping in an address to the United Nations in 2020 had announced that his country would effectively balance out its carbon emissions with measures to offset them before 2060, the first time the world’s biggest emitter of carbon dioxide has pledged to end its net contribution to climate change.
Global warming poses a significant threat to China, especially to its densely populated and economically critical low-lying coastal cities, and unabated climate change could cut its economic output between 0.5 percent and 2.3 percent as early as 2030, according to the report.
“China’s long-term growth prospects are increasingly dependent on rebalancing the economy from infrastructure investment to innovation, from exports to domestic consumption, and from state-led to market-driven allocation of resources,” said Manuela Ferro, the World Bank’s vice president for East Asia and the Pacific.
It would also be impossible to reach global climate goals without China transitioning to a low-carbon economy, the report said, noting that China emits 27 percent of global carbon dioxide and a third of the world’s greenhouse gasses.
“This transition will require a massive shift in resources, innovation and new technologies to enhance energy efficiency and resource productivity,” said the report, one in a new series assessing individual countries’ climate and development.
At the same time, it said China could leverage existing advantanges, including higher returns on production of low-carbon technologies, a high domestic savings rate and a leadership position in green finance.
But it said private-sector participation was “crucial” to ensure China’s path to carbon neutrality. It also underscored the need for a more predictable regulatory environment and better access to markets and finance.