green loans and green bonds. the evaluation results will be incorporated into the central bank ’ s financial institution ratings. by the end of the first quarter of this year, the 2 / 4 bis central bankers'speeches outstanding green loans in domestic and foreign currencies nationwide totaled rmb13 trillion, up 24. 6 percent year - on - year, which was 12. 3 percentage points higher than the growth rate of various loans in the same period. as required in the report on the work of the government this year, the pbc is working on instruments providing direct support for the reduction of carbon emissions by providing eligible financial institutions with low - cost funds, and thereby encourages them to provide financing at preferential interest rates for projects with significant impact on carbon emission reductions. to deepen international cooperation on green finance, the pbc has co - chaired with the us treasury the g20 sustainable finance working group ( sfw g ) this year, coordinating the g20 members in the discussion of developing the g20 roadmap for sustainable finance and in working on major issues including information disclosure, green standards, etc. in the meantime, the pbc is closely working with eu counterparts to converge taxonomies regarding green bonds and loans. shanghai has great potential and advantages in leading green finance development. it takes the lead in green and low - carbon development transition, i. e., it set up the carbon emissions trading market in 2013 and plans to reach carbon emissions peak before 2025, five years ahead of the country ’ s schedule. in the meantime, shanghai provides sound foundation for the innovative development of green finance because of its wide coverage of financial factor markets, the aggregation of financial institutions and its developed financial infrastructure. currently, over 90 percent of green bonds are issued in shanghai, and over 60 percent of green enterprises ’ ipos take place in shanghai. in the future, shanghai can further use its advantage to make greater strides in the carbon accounting of financial institutions, the mandatory climate and environmental information disclosure of financial institutions and financing entities, and the evaluation and verification of green financial products, etc. it will not only help shanghai sharpen its competitive edge in green finance and lead the global trend of sustainable investment and financing so as to help building itself into an international financial center. i t will also enhance the capacity of financial service in the transition towards green and low - carbon development, particularly the capacity to support the development of green technologies through financial innovation, in a bid to build shanghai into a science and

technology innovation center. fourth, we should enhance financial support for the construction of china ’ s carbon market from an overall view. the green and low - carbon transition relies on the support of both green finance, which has been mentioned just now, and the carbon emissions trading market. at its core, the carbon market aims at tightening emissions and encouraging emissions reduction through market - based pricing. in the meanwhile, the role of green finance in maturity conversion and risk management should be brought into play so as to guide cross - cycle investment and promote the r & d of lowcarbon technology. we need to work in the following two aspects. for one thing, we should set a clear goal of total carbon emissions as early as possible. with a cap on total emissions, allowance - based transactions of the market will be decided by the supply and demand and send a clear price signal, thus guiding and stabilizing expectations and promoting low - carbon investment. for another, we should leverage finance to support the building of the carbon market. the underlying logic of carbon market transactions is the transfer of emission rights, including the allocation, registration, trading, verification and evaluation of carbon emissions allowance. the actual operation cost is rather high, which lowered the market efficiency. more financial institutions and products, including carbon derivatives, when introduced, are helpful to fulfill the price discovery function of the carbon market, thus lowering the trading cost. in the meantime, green investment is a typical cross - cycle investment with long investment cycle, high uncertainty and great risks, which urgently requires risk management tools and methods. since many 3 / 4 bis central bankers'speeches matured risk management tools and models have been developed in the financial market, managing the carbon market in line with the logic of financial markets is conducive to effective cross - cycle allocation and hedging. the financial system will actively cooperate with the carbon emissions market and adapt to its construction needs, so as to balance the incentives, crosscycle allocation and risk management in green and low - carbon investment. over the past decade, shanghai has set up a carbon emissions trading system with “ clear institutional arrangements, regulated market, orderly management and effective emissions reduction ”. innovative products including carbon fund, carbon pledge and emissions allowance forward have been developed in an orderly way. shanghai has gained experience in coordinating supervision of carbon finance. the national carbon trading center, now situated in shanghai, will form a positive interaction with shanghai ’ s endeavor to build itself into an international financial center. this will also improve