China is launching five pilot zones to try to promote “green finance.” These zones include Guangdong, Guizhou, Jiangxi, Zhejiang and Xinjiang. Financial institutions in these areas will have incentives to provide credit and special funds for environmentally friendly industries. The programs will also focus on green insurance and on having banks explore new financing mechanisms that include emissions trading and water use permits.
China is currently in their fourth year of a “war on pollution” to try to reverse the damage that has been done with more than three decades of economic growth. The provinces, however, are having a hard time finding the money that is necessary to clean up their areas and to switch to cleaner types of energy.