Funding Sustainable Cities in China

Abstract

Currently, more and more people live in cities, and this leads to an enormous increase in global GHG emissions. Cities are blamed for the cause of environmental problems. Therefore, countries over the world aim to approach these problems by launching sustainable city programs. On April 22, 2016, China signed the Paris Agreement at the United Nations Headquarters in New York and formally promised that carbon dioxide emissions in China would reach the peak around 2030, and it would strive for reaching the peak as soon as possible. However, the transition to sustainable cities requires governments to invest a large sum of money. It was projected by IEA in 2010 that the total investment to projects responding to climate change may amount to US $ 220 billion each year between 2010 and 2020 and about US $ 1 trillion each year between 2020 and 2030. Against this backdrop, how to fund the development of sustainable cities becomes a pressing problem the Chinese government faces. Previously, it was a common practice for the Chinese government to resort to off-budget means such as land concessions and Urban Development and Investment Corporations (UDICs) to bridge the money gap. However, these tools are viewed as unsustainable due to the scarcity of land and the imbalance of benefit appropriation among different stakeholders caused by land finance and the lack of transparency financing through UIFPs. Therefore, this research aims to expand the funding sources through exploring the possibilities for the involvement of private sectors in the construction of sustainable cities and their roles playing in achieving climate goals nationally.