International Experiences in Green Finance Development

51 Lessons Learned from the Leading Green Finance Centers for Hong Kong government decision-making, social principles and market operations. Overall, the London case has not only demonstrated the prioritization of climate change and environmental issues in political voting patterns, but also in the demands of consumers and businesses for climate action. In the case of New York, the state level has been pioneering energy efficiency policies for years. The federal level’s policy under the new administration played a key role in magnifying the aspects which have been achieved at the state level and formed a combined push for inducing the demands for green financing. The development of green finance, as seen in the cases of Singapore, London andNewYork, is not pure market behavior and clear top-level messaging is a must. It involves certain governmental intervention as the stimulation. In Hong Kong’s case, there is a lack of clear goal setting for the direction of green finance development at the city’s top-level. Although positioning Hong Kong as a regional center for green finance has been raised in Hong Kong’s Climate Action Plan 2050, it is not echoed in the strategies or plans by the CASG. In other words, the idea of sustainable development has yet to be diffused into the city’s finance strategy. Such lack of clear goal setting by the high-level weakens motivation from different departments inside the government, as well as the market and stakeholders in the green finance ecosystem. The relationship between various sectors of green finance and the overall green financial system in Hong Kong has yet to be determined. The HKSAR government should first clarify the development goals of Hong Kong’s green finance, then formulate an action plan based on these goals. The local demands for capital are never sufficient to earn Hong Kong the reputation of an international financial center. Over the past decade or so, capital from Mainland China has gradually taken the largest share in Hong Kong and international capital has shown a declining trend. If Hong Kong wishes to guard its status among its competitors, conventional finance activities must be renewed. The government should present its green finance strategy as a priority for the city’s long-term development to help reserve Hong Kong’s advantages. Under the existing circumstances, the Hong Kong government can tilt its monetary and credit policies towards the investing and financing activities of green and sustainable development projects. The GBA should be one of its primary geographical targets for these green projects. Such a strategy should be clearly conveyed not only to the government’s departments, but also to the market and the public. 6.2 Coordination Mechanism: Create a Communication and Coordination Mechanism to Combine Government Efforts with Market Forces and Converge Capitals from Both Public and Private Sectors The practical experience of Singapore, London and New York shows that the promotion of green finance requires the establishment of a collaborative mechanism between governments, enterprises, intergovernmental organizations and non-governmental organizations to guide the joint efforts across the public and private sectors. At the same time, the development of green finance needs to use public investment to fill the funding gap caused by green transformation at the beginning, i.e. a lever to induce and mobilize green investment in the private sector.