China's central bank will include climate change among the issues it considers in implementing its monetary policy and supervisory role in future and will encourage financial institutions to help meet the country's goal of becoming carbon neutral, the bank's governor has said.

Yi Gang, governor of the People's Bank of China, made the comments at a closed-door session at China Development Forum on Saturday and they were published on the bank's website the following day.

The target of reaching peak carbon emissions before 2030 and becoming carbon neutral by 2060 had raised new and higher demands for the bank, he said.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

President Xi Jinping made the pledge at the United Nations in September, making China only the second major economy to have given such a promise.

China, US still split on hot-button topics but agree to climate change group

Extensive investments will be needed to meet the target and the financial markets must take the lead in providing the funding, Yi told the forum.

He estimated that it would need hundreds of trillions of yuan to fund the programme and the government could only cover a small proportion.

People's Bank of China governor Yi Gang. Photo: EPA-EFE alt=People's Bank of China governor Yi Gang. Photo: EPA-EFE

"We need to establish and complete a green financial policy system that leads and inspires the system to support green investments in a market-oriented way," he said.

"Public finance, however, can cover only a tiny fraction [of the cost]. It is therefore imperative to put in place sound public policy incentives to encourage market forces to fill the gap," he said.

China will need to spend US$6.4 trillion (41.6 trillion yuan) to build the new green power generation capacity needed to meet its goal of reaching carbon neutrality in 2060, but may struggle to secure the raw materials required, according to a report last week from energy analyst Wood Mackenzie.

It said solar, wind, storage and nuclear power projects would need to be given priority if the country is to produce enough electricity to cope with an estimated 75 per cent increase in demand and fill the gap left by fossil fuels.

'Crazy' US-China nuclear energy link up key to climate change fight: forum

Yi also said there needed to be more research into how climate change would affect financial stability and monetary policy, including the cost of extreme weather events and the impact of high carbon emissions on companies' asset values.