Financial Support for the Development of Green Energy Industry under the WWS Energy System Transition

Abstract

The transition to a Wind-Water-Solar (WWS) energy system is essential for global decarbonization, demanding significant financial support, particularly in complex multi-jurisdictional regions like the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). Characterized by its unique ‘one country, two systems’ framework, the GBA offers a critical case study of the multi-level governance (MLG) challenges involved in financing a large-scale WWS transition. Applying a Multi-level Governance (MLG) framework, this research analyzes the financial and regulatory barriers impeding WWS development in the GBA, arguing that key issues—such as fragmented policies, capacity disparities, data asymmetry, and weak accountability—stem from governance failures. These shortcomings collectively increase transaction costs, encourage regulatory arbitrage, and undermine efficient capital allocation, ultimately slowing the WWS transition. To address these challenges, this research proposes a tripartite policy framework: establishing a Green Finance Coordination Council to align standards, designing a blended finance mechanism to mitigate risks, and implementing a mandatory ESG disclosure framework to enhance transparency. By both identifying GBA-specific governance failures and offering targeted solutions, this paper presents a replicable MLG-based framework for guiding sustainable energy transitions in other complex, multi-jurisdictional regions globally.