On October 19, the Shanghai Municipal Government website published the “Implementation Opinions on Shanghai’s Accelerating the Building of an International Green Finance Hub to Serve Carbon Peak and Carbon Neutrality Targets” (hereinafter referred to as the “Implementation Opinions”). The “Implementation Opinions” put forward that by 2025, Shanghai will basically build an internationally influential carbon trading, pricing, and innovation center, and basically establish its status as an international green finance hub.
What unique advantages does Shanghai have in building an international green finance hub? In order to establish its status as an international green finance hub, what other areas does Shanghai need to do? In terms of innovative green financial product business, how to strengthen the supervision of green financial products? With these questions, the news interviewed Professor Mingkang Liu from the Academic Committee of the 60-member Forum on Green Finance. Shanghai has built an international green finance hub What unique advantage?
Liu Mingkang believes that Shanghai has four major advantages in building an international green financial hub. Among them, the first advantage is Shanghai’s international character. “Shanghai has unique advantages in strengthening international cooperation. As an open central city, Shanghai has advantages in international cooperation in the five major areas of legal construction, transparency construction, scientific and technological cooperation, market expansion, and risk prevention and control.” Liu Mingkang Say.
Liu Mingkang believes that Shanghai’s second advantage in building an international green financial hub benefits from the establishment of a national carbon emission trading market.
On July 16 this year, the national carbon emission trading market launched online trading. The power generation industry became the first industry to be included in the national carbon market, with more than 2,000 key emission units included. China’s carbon market will become the world’s largest market covering greenhouse gas emissions.
Liu Mingkang believes that Shanghai’s third major advantage is that Shanghai has a good foundation for cultivating capital markets, no matter from the perspective of the stock market or the bond market. Facilities, market conditions and market experience. In addition, Shanghai’s fourth advantage in promoting a green financial hub comes from the national strategy of integration in the Yangtze River Delta. As a hub, Shanghai has a vast area.
In order to establish its status as an international green finance hub, what other areas does Shanghai need to do?
The “Implementation Opinions” proposed that by 2025, Shanghai should basically establish its status as an international green finance hub. In order to accomplish this goal, how should Shanghai currently exert its efforts?
Liu Mingkang talked about Shanghai’s strengths in terms of international cooperation and market construction. From the perspective of international cooperation, Shanghai should learn from international experience and lessons in carbon reduction and emission reduction, emphasizing the development of laws and regulations, science and technology Cooperation, transparency construction, market expansion, and risk control. In terms of market construction, Liu Mingkang believes that the key is to achieve quantitative accuracy, clear rights, and active transactions through market means. At the same time, we must pay attention to legal and effective supervision. At present, we must first Achieve serious third-party professional verification of carbon emissions and other greenhouse gas emissions, carbon sinks, carbon sequestration, and carbon popularization. For this reason, it is necessary to speed up the definition of corresponding classification metrics and technical routes. In terms of market construction , Regardless of the product or type of financial services, we must do a good job in the open and open source of corporate data in the supply chain, and the effective use of adaptive technologies to achieve accurate data collection and accurate delivery, so that financial institutions can completely bid farewell to green services. “Green bleaching” and “greening”, and supervision should also keep up, so that innovation effects and possible risks can be verified, traceable, and accountable.
How to strengthen the supervision of green financial products?
The “Implementation Opinions” mainly adopt 24 measures in seven areas to help the country achieve carbon peak and carbon neutral goals. In terms of innovative green financial product business, the “Opinions” proposes to optimize green credit services, encourage banking financial institutions to increase the scale and proportion of green credit, and strengthen credit service support for green projects; vigorously develop green bonds and expand green bond issuance Scale, establish a reserve of green bond projects, promote the incremental expansion of green bonds; promote investment in green and sustainable development, support the development of green stock indexes, green bond indexes, ESG, carbon price-related indexes, and launch more green index-based transactions Open-end index funds (ETF) and other products.
In this process, how to strengthen the supervision of green financial products? Liu Mingkang believes that financial attributes should be introduced to avoid the risk of insufficient liquidity in the carbon emissions trading market and green electricity market, and to enhance the strength of carbon trading price signals. However, to introduce financial attributes to improve the functional construction of these two markets, we must pay attention to controlling the corresponding financial risks, and in particular, we must resolutely avoid the intervention of complex financial products (such as various complex derivatives), because historical lessons tell us that all Derivative products can easily become disguise for arbitrage. When we want to combine green financial market services with multi-level capital market developmentWhen it comes to connecting (such as the rated bond market and the high-yield bond market), it is necessary to establish in advance an effective systemic risk supervision system and corresponding implementation rules for limited licensed institutional investors and market makers in the carbon emission market. .