The Paulson Institute's green finance center will support China's development of a robust green finance market with market-based solutions.

The center, led by Deborah Lehr, vice-chairman of the Chicago-based think tank and research institution, marks a major step in the institute's efforts to promote sustainable economic growth and environmental protection in China and the United States, it said.

"The development of green finance is a top priority for China and one that aligns with the Paulson Institute's mission," said Paulson Institute Chairman Henry M. Paulson, Jr on Tuesday during a news conference in Beijing.

"The Paulson Institute's green finance center will work to help China achieve low-carbon economic growth, while strengthening US-China financial and commercial ties through promoting transparent, rules-based and market-oriented solutions."

China is moving full speed ahead to establish a green financing mechanism to support the economy's transition to sustainable growth, putting its full weight behind green financing. As environmental protection is a key national strategic objective for China, green finance is an essential element of achieving this goal.

Ma Jun, chief research economist at the central bank, estimated that the costs of cleaning up China's environment and meeting its commitment of achieving peak carbon emissions by around 2030 will amount to over 3 trillion yuan ($450 billion) annually.

Public sector financing can only cover about 15 percent of the estimated costs according to the People's Bank of China, which means innovative financial mechanisms must be developed to help attract the necessary private sector financing to reduce carbon emissions and support environmental protection.

China announced plans to set up pilot zones for green finance last June to support its industrial upgrading and antipollution campaign, according to plans issued by the People's Bank of China.

"China has launched an ambitious initiative to develop a vibrant green finance sector in a short period, and its efforts are driving change at home and abroad as countries seek innovative means to finance their own efforts in green development and to mitigate climate change," Lehr said.

"Through promoting new ideas and innovative models, the Paulson Institute green finance center is dedicated to working with our partners in China and internationally to support a vibrant international green finance market."

The center's efforts will build upon the Paulson Institute's current green finance program, which has developed partnerships with leading Chinese and international organizations to promote thought leadership, test new ideas, and develop innovative means of financing green development.

Key international stakeholders with which the Green Finance Center will work closely include the China Green Finance Committee, Tsinghua National Institute of Financial Research and its international partners, the UN Environment Program, the Securities Industry and Financial Markets Association, the Institute of International Finance, and the Sustainable Digital Alliance.