BEIJING, March 22 (Reuters) - China will make its green bond standards more consistent with international criteria to help attract more investment, Ma Jun, chief economist of the central bank, said on Wednesday.
China needs at least 2 trillion yuan ($290.41 billion) of green investment annually over the next five years to promote environmental protection and reduce the effects of pollution from its rapid industrial growth over the past three decades.
“One barrier to cross-border green capital flows is the lack of consistent standards and information disclosure requirements for green bonds between different markets,” Ma told a news conference. That could lead to duplication of green bond verifications and other transaction costs, he said.
Promoting “harmonisation” of green bond standards between China and Europe will help foster cross-border debt investment and create more opportunities for European investors, said Ma.
Rough estimates by some industry experts suggest that about 90 percent of Chinese green bonds issued are already consistent with standards adopted by most international investors, he said.
China has become the world’s largest green bond market, accounting for nearly 40 percent of global green bond issuance last year, Ma added. China’s green bond issuance reached about 230 billion yuan in 2016 - 200 billion yuan on the domestic market and 30 billion yuan overseas.
Developing a common language on green finance standards will enhance investors’ confidence to support green finance “through more consistent definitions and mythologies”, said Jonathan Taylor, vice president of the European Investment Bank.
The EIB is working with China’s Green Finance Committee to look into differences between the country’s green bond standards and international standards, officials said.
Rating agency Moody’s said in January green bond issuance worldwide could cross $200 billion in 2017, doubling the 2016 record, as it continues to be driven by the Paris climate agreement and China’s clean energy campaign. ($1 = 6.8868 Chinese yuan renminbi) (Reporting by Kevin Yao and Qizi Sun)