Abstract
Chinese Green Climate Fund (GCF) is expected to launch by the government in the foreseeable future to support local governments in climate change adaption and mitigation. Lessons from experiences of international financing and allocating mechanisms provide valuable references for establishing the Chinese GCF. This study aims to explore the feasibility of several well-recognized schemes for financing and allocating the Chinese GCF among China’s 30 provinces. These include: financing schemes of historical emission responsibility (HR), ability-to-pay (AP) and preference score compromises (PSC); as well as allocating schemes of carbon emissions intensity (CI), carbon emissions per capital (CC), GDP per capital (GC) and PSC. This study derives several important findings. Firstly, given different financing schemes, the coastal economically developed provinces including Shandong, Jiangsu, Guangdong, and Zhejiang would collectively shoulder most of the financing responsibility (almost 70% in total) and play central roles in climate financing. Shandong province presents high financing responsibilities mainly due to its export trades of primary products which rely on the development of high-polluted industries. Other three provinces show high financing responsibilities mainly due to the rapid growth of their industries (petrochemical, steel, building materials, electric power, etc.) for economic development. Secondly, the inland economically backward provinces including Shanxi, Ningxia, Guizhou, Xinjiang, and Gansu would be the top five largest recipients of the funds, obtaining more than 30% of total disbursements. The innovations and contributions of the present study are as follows: Firstly, this paper systematically explored the feasibility and alternative schemes for Chinese GCF for the first time. Further, it introduces PSC methods based on diversified approaches to explore suitable financing and allocating schemes. The schemes proposed would establish theoretical foundations for the Chinese GCF and would also promote the development of other kinds of financing for China and countries with similar economic features.
Similar content being viewed by others
Availability of data and material
All data are shown in the manuscript.
Code availability
Not applicable.
References
Aldy, J. E. (2006). Per capita carbon dioxide emissions: Convergence or divergence? Environmental and Resource Economics, 33(4), 533–555.
Bank, W. (2012). China 2030: Building a modern, harmonious, and creativehigh-income society. The World Bank.
Chi, W. (2008). The role of human capital in China’s economic development: Review and new evidence. China Economic Review, 19(3), 421–436.
Cohen, G., Jalles, J. T., Loungani, P., Marto, R., & Wang, G. (2019). Decoupling of emissions and GDP: Evidence from aggregate and provincial Chinese data. Energy Economics, 77, 105–118.
Costantini, V., Sforna, G., & Zoli, M. (2016). Interpreting bargaining strategies of developing countries in climate negotiations. A quantitative approach. Ecological Economics, 121, 128–139.
CPAACC. (2011). China’s Policies and Actions for Addressing Climate Change. http://www.gov.cn/jrzg/2011-11/22/content_2000047.htm.
Cui, L. (2015). Sharing the burden of financing the green climate fund in the Post-Kyoto era. International Journal of Climate Change Strategies and Management, 7(2), 206–221.
Cui, L., & Huang, Y. (2018). Exploring the schemes for green climate fund financing: International lessons. World Development, 101, 173–187.
Cui, L., Zhu, L., Springmann, M., & Fan, Y. (2014). Design and analysis of the green climate fund. Journal of Systems Science Systems Engineering, 23(3), 266–299.
Dellink, R., Elzen, M. D., Aiking, H., Bergsma, E., Berkhout, F., Dekker, T., & Gupta, J. (2009). Sharing the burden of financing adaptation to climate change. Global Environmental Change, 19(4), 411–421.
Den Elzen, M. G. J., & Meinshausen, M. (2006). Meeting the EU 2°C climate target: Global and regional emission implications. Climate Policy, 6(5), 545–564.
Den Elzen, M. G. J., Schaeffer, M., & Lucas, P. L. (2005). Differentiating future commitments on the basis of countries’ relative historical responsibility for climate change: Uncertainties in the ‘Brazilian proposal’ in the context of a policy implementation. Climate Change, 71(3), 277–301.
Dong, H., Geng, Y., Xi, F., & Fujita, T. (2013). Carbon footprint evaluation at industrial park level: A hybrid life cycle assessment approach. Energy Policy, 57, 298–307.
Dong, Z., & Wang, S. J. (2012). Carbon emission characteristics and countermeasures of Jiangsu Province. Journal of Anhui Agriculture, 40(14), 8253–8254.
Donner, S. D., Kandlikar, M., & Webber, S. (2016). Measuring and tracking the flow of climate change adaptation aid to the developing world. Environmental Research Letters, 11(05), 054006.
Eyraud, L., Clements, B., & Wane, A. (2013). Green investment: Trends and determinants. Energy Policy, 60, 852–865.
GBGF. (2016). Guidance on building a green financial system
GCAC. (2018). “Global action on climate change" proposal http://www.chinadevelopmentbrief.org.cn/news-21949.html.
Geddes, A., Schmid, N., Schmidt, T. S., & Steffen, B. (2020). The politics of climate finance: Consensus and partisanship in designing green state investment banks in the United Kingdom and Australia. Energy Research and Social Science, 69, 101583.
Grasso, M. (2010). An ethical approach to climate adaptation finance. Global Environmental Change, 20(1), 74–81.
Guo, C. (2011). The characteristics and enlightenment of economic and social development in the developed stage (Chinese). Hong Guan Jing Ji Guan Li, 6.
Halimanjaya, A., & Papyrakis, E. (2015). Donor characterostics and the allocation of aid to climate mitigation finance. Donor Characterostics and the Allocation of Aid to Climate Mitigation Finance, 06(03), 1550014.
Hasson, R., Löfgren, Å., & Visser, M. (2010). Climate change in a public goods game: Investment decision in mitigation versus adaptation. Ecological Economics, 70(2), 331–338.
Hof, A. F., den Elzen, M. G. J., & Mendoza Beltran, A. (2011). Predictability, equitability and adequacy of post-2012 international climate financing proposals. Environmental Science and Policy, 14(6), 615–627.
Horsch, A., & Richter, S. (2017). Climate change driving financial innovation: The case of green bonds. The Journal of Structured Finance, 23(1), 79–90.
Jiang, P., Khishgee, S., Alimujiang, A., & Dong, H. J. (2020). Cost-effective approaches for reducing carbon and air pollution emissions in the power industry in China. Journal of Environmental Management, 264, 110452.
Jonathan, P., & Paul, M. (2017). What drives national support for multilateral climate finance? International and domestic influences on Australia’s shifting stance. International Environmental Agreements: Politics, Law Economics, 17(1), 107–125.
Kumar, S. (2015). Green Climate Fund faces slew of criticism. Nature, 527(7579), 419–420.
Lee, K., & Oh, W. (2006). Analysis of CO2 emissions in APEC countries: A time-series and a cross-sectional decomposition using the log mean Divisia method. Energy Policy, 34(17), 2779–2787.
Li, H., Zhao, Y., Qiao, X., Liu, Y., Cao, Y., Li, Y., et al. (2017). Identifying the driving forces of national and regional CO2 emissions in China: Based on temporal and spatial decomposition analysis models. Energy Economics, 68, 522–538.
Liao, X. C., & Shi, X. P. (2018). Public appeal, environmental regulation and green investment: Evidence from China. Energy Policy, 119, 554–562.
Lin, S., Zhao, D., & Marinova, D. (2009). Analysis of the environmental impact of China based on STIRPAT model. Environmental Impact Assessment Review, 29(6), 341–347.
Luppi, B., Parisi, F., & Rajagopalan, S. (2012). The rise and fall of the polluter-pays principle in developing countries. International Review of Law and Economics, 32(1), 135–144.
Markandya, A., Antimiani, A., Costantini, V., Martini, C., Palma, A., & Tommasino, M. C. (2015). Analyzing trade-offs in international climate policy options: The case of the green climate fund. World Development, 74, 93–107.
Müller, B. (1998). Justice in global warming negotiations: how to obtain a procedurally fair compromise. OIES paper: EV26. Oxford Institute for Energy Studies.
Müller, B. J. (2001). Varieties of distributive justice in climate change. Climatic Change, 48(2), 273–288.
NBS. (2016a). China statistical yearbook 2016. National Bureau of Statistics, China Statistics Press. http://www.stats.gov.cn/tjsj/ndsj/
NBS. (2016b). China ciry statistical yearbook. National Bureau of Statistics, China Statistics Press. http://www.stats.gov.cn/tjsj/tjcbw/201706/t20170613_1502795.html
NEA. (2016). China Energy statistical yearbook 2016. National Energy Administration, http://www.stats.gov.cn/tjsj/tjcbw/201706/t20170621_1505833.html.
Netherlands Environmental Assessment Agency (NEAA) (2008). China Now No. 1 in CO2 Emissions, USA in Second Position. 〈http://www.mnp.nl/en/dossiers/Climatechange/moreinfo/Chinanowno1inCO2emissionsUSAinsecondposition.html〉 (Accessed 2 January 2017).
OECD. (2015). Climate finance in 2013–14 and the USD 100 billion goal. Paper presented at the Organization for Economic Co-operation and Development.
Poumanyvong, P., & Kaneko, S. (2010). Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis. Ecological Economics, 70(2), 434–444.
Schula, K., & Feist, M. (2021). Leveraging blockchain technology for innovative climate finance under the Green Climate Fund. Earth System Governance, 7, 100084.
Sharma, S. S. (2011). Determinants of carbon dioxide emissions: Empirical evidence from 69 countries. Applied Energy, 88(1), 376–382.
Silverstein, D. (2011). [Using a harmonized carbon price framework to finance the Green Climate Fund].
Skovgaard, J. (2017). Limiting costs or correcting market failures? Finance ministries and frame alignment in UN climate finance negotiations. International Environmental Agreements: Politics, Law Economics, 17(1), 89–106.
Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. London: Methuen.
Su, B., & Ang, B. W. (2017). Multiplicative structural decomposition analysis of aggregate embodied energy and emission intensities. Energy Economics, 65, 137–147.
Tan, Z., Li, L., Wang, J., & Wang, J. (2011). Examining the driving forces for improving China’s CO2 emission intensity using the decomposing method. Applied Energy, 88(12), 4496–4504.
UNFCCC. (2010b). Report of the sixteenth session of the conference of UNFCCC. https://unfccc.int/process-and-meetings/conferences/past-conferences/cancun-climate-change-conference-november-2010/cancun-climate-change conference-november-2010–0.
UNFCCC. (2010a). Report of the conference of the parties on its fifteenth Session. Paper presented at the United Nations Framework Convention on Climate Change.
Wang, H., Ang, B. W., & Su, B. (2017). A multi-region structural decomposition analysis of global CO2 emission intensity. Ecological Economics, 142, 163–176.
Wang, Q., Hang, Y., Su, B., & Zhou, P. (2018). Contributions to sector-level carbon intensity change: An integrated decomposition analysis. Energy Economics, 70, 12–25.
Weiler, F., Klöck, C., & Dornan, M. (2018). Vulnerability, good governance, or donor interests? The allocation of aid for climate change adaptation. World Development, 104, 65–77.
Winkler, H., Brouns, B., & Kartha, S. (2006). Future mitigation commitments: Differentiating among non-Annex I countries. Climate Policy, 5(5), 469–486.
Wu, P. I., Wang, Y. Q., & Liou, J. L. (2019). Cost effectiveness analysis for emission trading mechanisms: A provincial simulation of upcoming five-year plans in China. Journal of Cleaner Production, 207, 225–235.
Xu, G. Q., Liu, Z. Y., & Jiang, Z. H. (2006). Factor decomposition model and empirical analysis of carbon emissions in China. Population, Resources and Environment in China, 6, 158–161.
Yamineva, Y. (2016). Climate finance in the paris outcome: Why do today what you can put off till tomorrow? Review of European, Comparative and International Environmental Law, 25(2), 174–185.
Yang, Y., Wang, Z., & Wu, J. (2016). Study on the principle of responsibility sharing in international climate finance (Chinese). Strategy and Policy Decision Research, 31(07), 820–829.
Yi, W.-J., Zou, L.-L., Guo, J., Wang, K., & Wei, Y.-M. (2011). How can China reach its CO2 intensity reduction targets by 2020? A regional allocation based on equity and development. Energy Policy, 39(5), 2407–2415.
York, R., Rosa, E., & Dietz, T. (2003). Footprints on the earth: The environmental consequences of modernity. American Sociological Review, 25(2), 279–300.
Yu, S., Wei, Y.-M., & Wang, K. (2014). Provincial allocation of carbon emission reduction targets in China: An approach based on improved fuzzy cluster and Shapley value decomposition. Energy Policy, 66, 630–644.
Zhang, F., & Jiang, T. (2011). An research on the relationship of carbon emissions, export trade and economic growth: Based on the data of 1984 to 2008 of Shandong Province. Ecological Economy, 2, 61–65.
Zhu, Q. R. (2007). Co-integration and granger causality test between energy consumption and export trade: A case study of Shandong Province. Exploration of International Economy and Trade, 4, 9–12.
Acknowledgements
This work was supported in part by the National Natural Science Foundation of China (No. 72071008; 71771011; 72174020; 71904009), Beijing Social Science Foundation (No. 20GLC054), and the MOE (Ministry of Education in China) Project of Humanities and Social Sciences (No. 19YJC840041).
Author information
Authors and Affiliations
Contributions
All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Meng Xu and Zhongfeng Qin. The first draft was written by Meng Xu. All authors read and approved the final manuscript.
Corresponding author
Ethics declarations
Conflict of interest
There are no competing interests or personal relationships that could have appeared to influence the work reported in this paper.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Xu, M., Qin, Z. & Wei, Y. Exploring the financing and allocating schemes for the Chinese Green Climate Fund. Environ Dev Sustain 25, 2487–2508 (2023). https://doi.org/10.1007/s10668-022-02137-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10668-022-02137-5