ICBC’s chief economist stresses the need for ‘green recovery’

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A “green recovery” is considered to be the best path for meeting the needs of both environmental protection and sustainable economic growth.

Zhou Yueqiu, chief economist of the Industrial and Commercial Bank of China (ICBC), gave his views on this topic at the China International Finance Annual Forum, held in Beijing on Sept 5.

He started by expressing concern about the post pandemic economic recovery, which has been hit by global inflation and rising energy prices.

“Given the threats to the energy security of many countries, China’s transition to low-carbon energy is also likely to be impacted.”

He then pointed out three key ways to address the challenges, including optimizing resource allocation, strengthening risk management, and giving full play to the carbon trading market.

Optimizing resource allocation:

New financial tools such as green finance and carbon trading are the main driving force for optimizing resource allocation.

But at the same time, the role of traditional financial tools cannot be ignored. Zhou emphasized the importance of increasing the amount of support for green industries in the traditional financial sector.

In addition, while expanding financial support for strategic emerging industries such as new materials, new energy, and clean energy vehicles, he said that attention must also be paid to supporting the technological transformation of energy conservation and the carbon reduction of traditional industries.

Strengthening risk management:

For internal risks, new tools, such as the ability to use big data, can be utilized to accurately identify and control them. As for external risks, it is necessary to avoid the blind influx of excessive funds through macro-control and policy guidance.

However, relevant policies must also be in line with reality, and must not arbitrarily interrupt financing in the process of transformation

Giving full play to the carbon trading market:

Active and open carbon trading is undoubtedly the key to promoting a green recovery.

The carbon markets in the United States, the European Union and other countries and regions developed relatively early, and there are lessons that can be learnt from their experiences.