Senior Chinese officials and policy advisers have called for more market-based moves to promote a low-carbon transition, including giving full play to the pricing mechanism in green finance and accelerating the development of carbon accounting.

Xiao Yuanqi, vice-chairman of the China Banking and Insurance Regulatory Commission, said it is critical to leverage the pivotal role of the pricing mechanism in making the financial sector supportive of sustainable development.

"Both the pricing of funds and the charging of services act as the anchor that adjusts the flow and allocation of financial resources," Xiao said.

According to Xiao, the outstanding balance of green lending offered by 21 major banks in China has reached 13 trillion yuan ($2.01 trillion), ranking it as the highest in the world. The business of green bonds and environmental liability insurance has grown at a rapid rate as well.

To further promote green finance, price premiums should be formed for institutions and products that align themselves with sustainable development, which will motivate more transactions that fit into sustainable development and dampen those not doing so, he said.

Xiao made the remarks at the Sustainable Development Forum 2021 in Beijing on Sunday, which was organized by the Center for International Knowledge on Development and ran through Monday.

Liu Shijin, deputy director of the economic committee of the National Committee of the Chinese People's Political Consultative Conference, the top political advisory body, addressed the forum and said the country must comply with the law of the market in pursuing green transition.

In other words, the priority at present should be put on building the technology and capacity of green energy to achieve a smooth transition in energy structure, instead of just reducing emissions by simply curbing production, Liu said.

He said administrative measures have so far been the main driver of decarbonization in China, but the nation may step up efforts to let the market play a bigger role in green transition.

Specifically, Liu said the country should speed up the development of a carbon accounting system, which measures how much carbon dioxide equivalents an entity emits.

On the back of the system, carbon emission accounts can be established and clarify the carbon reduction responsibility for government bodies, enterprises and individuals, motivating each market player to fulfill its own obligations, Liu said.

"This is an urgent task, but has been a weak link that is yet to raise adequate attention," Liu said.

Their remarks echoed a top-level meeting in late July that urged putting an end to "whirlwind campaigns" for carbon reduction.

Xiao called on the whole of society to cooperate in developing green finance, as the formation of pricing mechanisms entails clear and transparent standards of sustainable development in various industries and the access to related data, which cannot be performed solely by the financial sector.

There have been good examples in this regard as some organizations in a number of countries have conducted independent evaluations and released the list of enterprises that fit into sustainable development, Xiao said.