2023 Research Report
Decarbonisation Pathways and How Finance Can Help to Accelerate Business to Transition in Guangdong-Hong Kong- Macao Greater Bay Area
By Zhuohui Huang, Daiyang Zhang, Xiaozhen Li, Xiaoqian Jiang, Ying Cui, Yonghong Liu, Xuelan Zeng, Lawrence Iu, Bo Yu, Ling Miao, Xiaoling Hu, Karina Chow, Lauren Chan, Weichi Li, and Jiajun He
27 April 2023
This report aims to connect decarbonization solutions with necessary finance required to accelerate the net-zero transition in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). It applies a top-down approach to predict macro pathways for the whole GBA, then applied bottom-up approach to analyse specific decarbonisation pathways and solutions for key energy consuming sectors — manufacturing industries, road transport, and buildings, to highlight actions most needed to achieve the 30-60 goals – China’s national goal of achieving peak carbon emissions by 2030 and carbon neutrality by 2060 – or even earlier. Based on the above decarbonisation pathways, this report estimated how much investment will be needed and how to solve the challenges faced to ensure finance to help accelerate businesses to transition.
- The GBA is expected to lead by example in advancing its carbon emission peaking and carbon neutrality as well as creating a regional benchmark for green and low-carbon development.
- Clean electricity will contribute to the largest emission reduction in the long-term for all energy consumption sectors – manufacturing industries, road transport and buildings. In the mid-term, energy efficiency improvement and cleaner energies in manufacturing and buildings, and mode shift in transport will be the key to decarbonisation.
- It is estimated that the GBA needs appr. US$1.84 trillion to achieve carbon neutrality by 2060, which equals to around 1% of cumulative GDP during 2020-2060. The analysis also estimated the US$200-700 billion will be needed for road transport, and US$150-300 billion for the building sector.
- The report recommends financial practices to accelerate transition: establishing cross-regional agency coordination mechanism in the GBA; facilitating interoperability of transition finance taxonomies and information disclosure standards in Mainland China and Hong Kong as well as internationally; encouraging financial institutes and enterprises to set net-zero targets; facilitating development of regional carbon markets; developing transition-related financial toolbox to scale-up financing; and developing sector-specific financial solutions for key sectors.
This publication is a joint effort of the World Resources Institute (WRI), Civic Exchange, the Guangdong Hong Kong Macau Greater Bay Area Green Finance Association (GBA-GFA), Hong Kong Green Finance Association (HKGFA), Central University of Finance and Economics, Guangdong University of Technology, Sun Yat-sen University, and China Quality Certification Center Guangzhou Branch.
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