tailieunhanh - ECONOMY-WIDE AND EMERGING ISSUES

Green bonds are broadly defined as fixed-income securities that raise capital for a project with specific environmental benefits. Most green bonds issued to date have been climate bonds, where the proceeds go to climate mitigation or adaptation efforts. • Corporate, infrastructure and other projects have reduced access to traditional finance given the financial crisis’ effect on the global financial sector, so debt capital markets represent a key pool of assets that must be tapped in order to finance the transition to a low-carbon, resource-efficient and climate resilient economy. • Institutional investors are a natural market for higher rated green bonds, given their. | Policy Brief June 2012 SP Sustainable Prosperity ECONOMY-WIDE AND EMERGING ISSUES Green Bonds1 Key Messages Sustainable Prosperity is a national research and policy network based at the University of Ottawa. SP focuses on market-based approaches to build a stronger greener more competitive economy. It brings together business policy and academic leaders to help innovative ideas inform policy development. Sustainable Prosperity c o University of Ottawa 555 King Edward Avenue Ottawa ON K1N 6N5 613-562-5800 x3342 Green bonds are broadly defined as fixed-income securities that raise capital for a project with specific environmental benefits. Most green bonds issued to date have been climate bonds where the proceeds go to climate mitigation or adaptation efforts. Corporate infrastructure and other projects have reduced access to traditional finance given the financial crisis effect on the global financial sector so debt capital markets represent a key pool of assets that must be tapped in order to finance the transition to a low-carbon resource-efficient and climate resilient economy. Institutional investors are a natural market for higher rated green bonds given their growing concern for managing the risks associated with long-term issues such as climate change and their existing heavy investment in low-risk bonds. However given that not all green bonds have been investment grade at least BBB the lower rated bonds are not of sufficient interest to large institutional investors due to their limited size and higher risk. There is already a sizeable global market for green bonds though the issuances to date are dwarfed by the mainstream bond market. The biggest immediate issues for the expansion of a green bond market are issuance scale liquidity and monitoring. A larger number of bigger green bond issuances are needed especially for renewable energy and other corporate green bonds. A liquid green bond market requires at least USD 200-300 .