Will COVID-19 affect China's peak CO2 emissions in 2030? An analysis based on the systems dynamics model of green finance

Achieving the peak of carbon dioxide (CO2) emissions requires a large amount of green and low-carbon investment. Whether the green finance system can efficiently support the capital need for achieving the CO2 emissions target in the context of the COVID-19 epidemic is a matter of concern. This paper constructs a system dynamics model (SD model) to illustrate the quantitative relationship between the green finance system and CO2 emissions and introduce the COVID-19 epidemic as a variable to analyze ten simulation scenarios regarding the carbon emissions commitment realization under different green finance and economic growth status. It is shown that: (1) Regardless of the impact of COVID-19, China can meet its commitment by reaching its CO(2 )emissions peak in 2030 and realizing a 20% non-fossil energy proportion in 2025; (2) Under the impact of the epidemic, the goal can not be obtained in all energy consumption scenarios when the government expenditure on the environment is low. The target year of reaching CO2 emissions peak becomes 2033, 2037, and 2040. The results indicate that reducing government expenditure on environment protection makes the CO2 emissions peak target less likely to be achieved within a given time frame. We also concluded with important policy implications according to the result of the simulations. Overall, this study makes a reference for other economies and researchers to quantitatively predict the interaction relationship between the green finance system and CO2 emissions in the context of COVID-19, which provides policymakers with insights into a joint power of energy consumption upgrading and green capital guidance.

Automated summary

This paper quantitatively analyzes the relationship between the green finance system and CO2 emissions, considering the impact of the COVID-19 epidemic. The study finds that China can achieve its CO2 emissions peak and non-fossil energy proportion targets, but the timeline may be extended if government expenditure on the environment is low during the epidemic.