Turning to 2060 Carbon Neutrality into Reality: Innovated Green Finance in Chinese Cities

After nearly 50 years of reform, the Chinese economy experienced exponential growth at the expense of the environment. China's air pollution has reached critical levels, necessitating an urgent transformation. The Chinese government has proposed an ambitious goal of carbon neutrality by 2060. Following this ambitious environmental goal, regulators heavily promoted green finance as a key to addressing the funding gap for sustainable infrastructure. The rise of green finance vehicles, with the goal of incentivizing social capital to invest in formally un-attracted sustainable infrastructure and closing the financing gap for green transformation, has gained enormous practical popularity among major sustainable infrastructure developers. While green finance instruments have been extensively studied, the comparative effectiveness of different green finance instruments in attracting social capital remains unknown. This study aims to investigate the relative comparative advantage of the most prominent green finance instrument and the most innovative green finance instrument, namely green bonds and green Real Estate Investment Trust, and to assess their relative effectiveness in increasing social capital's willingness to invest. This study will significantly contribute to our understanding of green finance's effectiveness and inform better policymaking for sustainable urban development and carbon neutrality.