How Much Financing China Needs to Achieve Carbon Peak and Carbon Neutrality Goals?

China requires financial support to achieve its dual-carbon goals, thus the carbon emission peak and neutrality. However, currently, there is a lack of systematic estimation regarding the amount and structure of finance needed to achieve these goals. This paper attempts to fill this research gap by constructing a carbon emission prediction model and a simultaneous equations model which characterizes the five core channels that finance contributes to carbon emission. Cointegration estimation, suitable for long-term forecasting, was used to estimate the amount of finance required for carbon emission paths planned by the International Energy Agency (2021) for China to achieve dual-carbon goals. Finally, the finance structure was estimated using the Bootstrap method. The study finds that Aggregate Financing to the Real Economy (AFRE) can significantly affect carbon emission through the five channels. The estimation shows that the size of AFRE should increase from 2021 and grow at a rate higher than the historical level. The earlier achieves carbon neutrality, the greater the AFRE required. Additionally, the expansion magnitude of AFRE required for emission peak is relatively low, while that required for emission neutrality must increase significantly. The study estimates the proportions of financing structure, from high to low, are indirect financing (61%), other financings (17%), direct financing (12%), and shadow banking (10%), and their growth rates and fluctuations are different due to their respective risks