Can Green Bonds Bankroll A Clean Energy Revolution? by Marc Gunther: Yale Environment 360.
To slow global warming, tens of trillions of dollars will need to be spent in the coming decades on renewable energy projects. Some banks and governments are issuing green bonds to fund this transformation, but major questions remain as to whether this financing tool will play a game-changing role.
Looked at from one angle, climate change is an infrastructure problem. To limit global warming to 2 degrees C and avoid the worst effects of climate change, about $44 trillion will need to be invested in low-carbon projects like wind farms, solar panels, nuclear power, carbon capture, and smart buildings by 2050, the International Energy Agency estimates. That’s more than $1 trillion a year — roughly a four-fold jump from current investment levels.
Where’s the money going to come from? Maybe from green bonds, say bankers and environmentalists alike. Green bonds, which are also known
as climate bonds, are fixed-income investments that are designed to finance environmentally friendly projects. Pioneered by international development banks — the European Investment Bank issued the first climate bond in 2007, followed a year later by the World Bank — they are today issued by state and local governments (Massachusetts, Hawaii, New York, and the cities of Stockholm and Spokane, Washington, among others) and by big companies (Bank of America, Unilever, and the French utility GDF Suez).
…click on the above article to read the rest of the article…
