China approves its first carbon-neutral exchange traded funds

©Reuters

Chinese authorities have approved the country’s first carbon-neutral exchange-traded funds (ETF’s), following concerted efforts by regulators to drive growth in green finance. Shanghai approves regulations to promote green finance development. The regulations, effective on 1 July, will support the establishment of evaluation, identification, and classification standards for green finance products and projects.

©Shenzhen Power Supply Bureau

Not only in Shanghai, Shenzhen Power Supply Bureau and China Emissions Exchange jointly launched an applet called Tan Pu Hui system, a mechanism for incentivising and rewarding lower carbon behavior and purchases, and developing a marketplace for low carbon goods and services for use by households.

The market will provide incentives for individuals to reduce carbon emissions such as driving less, using less electricity, and saving energy. It is worth noting that by next year, the Tan Pu Hui system points can be connected to the Shenzhen carbon trading market for purchase by high-energy-consuming social groups or enterprises, and residents can exchange for gift cards, subway cards, and other rights and interests. This means that personal emission reductions are moving towards asset properties.