A green economic stimulus in China

It is common knowledge that China's headlong drive towards economic development has created massive environmental problems in the most populous nation on earth. The Chinese are now recognizing this and are attempting to deal with the challenge in a variety of ways. This is one.

China Uses Green Loans to Tackle Environmental Problems
Yingling Liu, WorldWatch Institute

A new joint effort between China’s government and the International Finance Corporation (IFC) will likely wean industrial polluters in the country off of environmentally destructive bank loans. In late January, China’s State Environmental Protection Administration (SEPA) signed an agreement with the IFC to introduce the globally recognized Equator Principles in China, according to China Daily. The Equator Principles are a voluntary set of guidelines for assessing and managing the environmental and social risks associated with project finance.

Under the collaboration, SEPA and the IFC will conduct joint research on adapting the Equator Principles and developing environmental benchmarks for lending in China’s financial sector. The collaboration will provide a set of international standards for China’s “green loan” initiative, launched in July 2007 by SEPA in partnership with China’s Central Bank and the China Banking Regulatory Commission. The initiative aims to construct a platform for sharing the environmental records of industries with environmental authorities, the Central Bank, and commercial banks. Banks will also be pushed to factor in environmental considerations when distributing loans. The initiative aims to use financial tools to force “self discipline” on businesses for their own survival and development.

More here. For more about China's environmental problems — and solutions — read "The Last Empire: China's Pollution Problem Goes Global" in Mother Jones and Lester Brown's Plan B 3.0.