A. Green Bond…
A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.
- A green bond is a fixed-income instrument designed specifically to support specific climate-related or environmental projects.
- Green bonds typically come with tax incentives to enhance their attractiveness to investors.
- The World Bank issued the first official green bond in 2009.The World Bank is a major issuer of green bonds
- Around $157 billion worth of green bonds were issued in 2019.
B. CLIMATE BOND…
The United Nations Framework Convention on Climate Change (UNFCCC) is currently negotiating the establishment of a $100 billion a year by 2020 Green Climate Fund (GCF) – in fact the. In addition, some countries have their own funds, such as the UK’s announced International Climate Fund (ICF) amounting to £2.9 billion in funding over the next four years.
There’s been a lot of discussion about how to best use those funds. Much of that discussion has been ill-informed. Here we propose a path forward.
The International Energy Agency has estimated that $10.5 trillion in additional investment beyond “business-as-usual” (BAU) – i.e. redirecting capital to low-carbon technologies from conventional – is needed globally in the energy sector over 2010–2030 to be consistent with +2 Celsius climate target.