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The UK’s Green Gilt is Marketing Puff and a Pointless Distraction

September 23, 2021

The UK’s Green Gilt is Marketing Puff and a Pointless Distraction

The UK attracted a record £137 bln order book for its £10 bln Green Gilt. But what does the Green Gilt achieve? Its marketing puff. It may disguise how ill-considered and ultimately self-defeating the Government’s rush to looking green has been. No matter how well intentioned a Green Gilt is – its style over substance, papering over the cracks in a confused and contradictory long-term climate-change mitigation strategy.  

“Every decent con man knows a simple truth is more powerful than an elaborate lie..”

This morning: The UK attracted a record £137 bln order book for its £10 bln Green Gilt. But what does the Green Gilt achieve? Its marketing puff. It may disguise how ill-considered and ultimately self-defeating the Government’s rush to looking green has been. No matter how well intentioned a Green Gilt is – its style over substance, papering over the cracks in a confused and contradictory long-term climate-change mitigation strategy.  

It fills my heart with joy and makes me proud to be British that the UK Government just received £137 billion of orders for its debut Green Bond – a record historical amount for any UK bond or Green Bond. (US Readers… disinterested sarcasm alert.)

Investors were apparently tumbling over themselves to place orders, but I can’t say many will be surprised or disappointed when they got less than 7% of their order. The £10 bln Green Gilt due in 2033 (12 year) will pay a 0.875% and was priced to yield 0.8721%… which is a bit more than the comparable 11year bond was paying at the time….

The proceeds of the new Green Gilt will specifically be earmarked to support green projects including zero-emission transport and offshore wind projects. I don’t quite understand how the spending programme will actually work…

…click on the above link to read the rest of the article…

EU To Propose Exempting “Green” Bonds From Deficit And Debt Limit Calculations

September 10, 2021

EU To Propose Exempting “Green” Bonds From Deficit And Debt Limit Calculations

Yesterday, the ECB announced that in Q4, it would “modestly lower the pace of net asset purchases under the PEPP than in the previous two quarters” (even as Lagarde scrambled to convince markets not to call it tapering) with Reuters sources adding that “policymakers set a monthly target of between 60 billion and 70 billion euros” down from 80 billion currently “with flexibility to buy more or less, depending on market conditions.” Putting this non-taper taper in context, Nomura calculated that “even if net PEPP is scaled down to €60bn/month the ECB would still buy 85% of the remaining gross supply, strongly supporting EUR rates.”

Despite the shrinkage of ECB bond-buying, Lagarde made it clear that the fiscal spice must flow:

  • *LAGARDE: FISCAL SUPPORT HAS TO BE CONTINUED
  • *LAGARDE: FISCAL SUPPORT NEEDS TO BE MORE TARGETED

The most notable proposal is to exempt “green” investments from calculations of deficit and debt limits and temporarily forgetting existing rules that say debt must be cut every year, Reuters reported citing documents prepared for the ministers’ talks showed.

“The challenge in coming years will be to consolidate deficits while increasing green investments to achieve the ambitious targets of the EU to cut emissions or any other investments,” a note prepared by host Slovenia said.

In other words, the EU will use the “green” strawman of fighting climate change as a loophole to issue debt over and above the EU’s self-imposed ceilings.

…click on the above link to read the rest of the article…

Ontario’s Sustainable Development Plan Is Beginning To Fall Apart | Canadian Awareness Network

December 14, 2014

Ontario’s Sustainable Development Plan Is Beginning To Fall Apart | Canadian Awareness Network.

In recent weeks reports about green energy jobs surpassing oil sand job creation, of Ontario taking big steps into the growing green bonds market, and many more stories that would lead people to believe that sustainable development is excelling in the province. Have been splashed all over the news.

Is this true? Or just stories that do not paint the whole picture?

Green energy programs have created around 1,000 more jobs than the oil sands. That part is correct, but there is several points that have been left out.

1. Clean energy programs have created 23,700 jobs compaired to 22,340 by the oil sands projects. This leaves out that overall oil production in Alberta alone, employs more than 120,000 people. If we are going to compare job creation between the two industries, would it not make sense to include all stats and figures? This is leaving out the comparision of how many of these jobs are temperary and how many are permanent as well.

2. Green energy programs would have been halted a long time ago without government subsidies. Below is a breakdown of how much is being spent to keep the programs afloat and how much it is costing the people of the province.

…click on the above link to read the rest of the article…

Can Green Bonds Bankroll A Clean Energy Revolution? by Marc Gunther: Yale Environment 360

November 24, 2014

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.

by marc gunther

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 

green crab

Leaflet/Wikimedia Commons
Green bonds can finance large-scale renewable energy projects like wind farms.

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…

Olduvai IV: Courage
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