(Source: Point News)
Hong Kong's Financial Services Development Council (FSDC) has recently released a report proposing the pilot implementation of the “Carbon Market Link” in the Greater Bay Area, with a view to promoting Hong Kong as a leading regional carbon trading center. The report, which has attracted much attention, points out that the global voluntary carbon market is facing explosive growth and is expected to surge from the current $723 million to $10 billion to $40 billion by 2030. The FSDC has also admitted that although Hong Kong is uniquely positioned for carbon market development, its current potential has not yet been fully realized.
The transformational wave of global green finance is reshaping the landscape of economic development. The International Renewable Energy Agency (IRENA) has emphasized that the transition to a low-carbon economy holds enormous economic potential, with a forecast of up to US$150 trillion of investment opportunities by 2050. In the face of this grand prospect, Hong Kong is actively charting its unique position in the field of sustainable finance.
Mr. Laurence Li, Chairman of the FSDC (Source: Point News)
According to Mr. Laurence Li, Chairman of the FSDC, Hong Kong is uniquely positioned to become a leader in the carbon market. As an international financial center, Hong Kong's financial ecosystem has accumulated deep expertise in green finance. In recent years, Hong Kong's performance in the sustainable bond market has been particularly impressive. A report by the World Climate Bonds Initiative (CBI) in June this year showed that Hong Kong's sustainable bond market, driven by SAR government bond issuance, has achieved its largest growth to date, leading the Asian region and entering the top 10 government issuers in terms of global green bond issuance for the first time.
To unleash the full potential of the carbon market, the FSB has put forward five strategic recommendations. Firstly, it will stimulate demand for carbon credits through diversified means; secondly, it will establish a “Carbon Market Access” mechanism to facilitate cross-border carbon trading; at the same time, it plans to set up a carbon registry system operated by a non-governmental organization (NGO) to enhance the international recognition and governance of carbon credits; and it will provide legal safeguards for carbon trading to attract more market participants. Most critically, the FSDC plans to build a comprehensive carbon market ecosystem, gather professional service capabilities, and introduce advanced technologies to support carbon trading.
(Source: Hong Kong Commercial Daily)
It is worth noting that the development of the voluntary carbon market in Mainland China should not be overlooked as well. The report predicts that the Mainland's voluntary carbon market will grow to US$10 billion by 2030, and is expected to become the largest voluntary carbon market in the world. This provides tremendous opportunities for Hong Kong in the development of the regional carbon market.
Looking back at Hong Kong's past practices in green finance, the Green Transformation Roadmap for Public Buses and Taxis recently released by the SAR Government is a case in point. This roadmap not only demonstrates Hong Kong's determination to promote green transformation in the transportation sector, but also reflects the government's forward-looking thinking in sustainable development. Hong Kong has already made remarkable progress in the promotion of electric vehicles and the development of charging infrastructure, creating a good practical foundation for carbon market development.
(Source: Sing Tao Headline)
Mr. Laurence Li emphasized that through these initiatives, Hong Kong is expected to enhance the liquidity and efficiency of the carbon market and promote the development of innovative financial products and risk management tools for carbon trading. More importantly, Hong Kong is striving to contribute uniquely to the global Sustainable Development Goals (SDGs) by positioning itself as a key hub connecting traditional and sustainable finance.
Looking ahead, there is a growing global discussion on sustainability. The Hong Kong industry has recognized that green finance alone cannot fully bridge the existing sustainability gap, and that more stakeholders need to be engaged to create a more inclusive sustainable financial environment. Against this backdrop, Hong Kong is shaping a unique role for itself in the global carbon trading market. Through precise strategic layout and continuous innovative practices, Hong Kong is expected to become an important engine for driving the development of sustainable finance.
Editor's Note:
The “Carbon Market Access” initiative proposed by the Hong Kong Monetary Authority (HKMA) reflects the international financial center's determination to seek a strategic breakthrough in the wave of global sustainable development. This proposal is not only a strategic judgment of the potential of the carbon trading market, but also reflects Hong Kong's unique advantages in linking the Mainland and international markets. The key lies in whether Hong Kong can truly build an internationally competitive carbon trading platform through system innovation, technology empowerment and ecological construction. The global carbon market is currently undergoing a period of rapid evolution. If Hong Kong can seize this opportunity, it will not only enhance its strategic position as an international financial center, but also contribute significantly to the national goal of carbon neutrality. This will require forward-looking policies, market openness and internationalization of professional services.
