Green Finance And Investment Mobilising Bond Markets For A Low Carbon Transition

This report describes the development of the green bond market as an innovative instrument for green finance, and provides a review of policy actions and options to promote further market development and growth. Since 2007-08, so-called “green bonds” have emerged and the market has risen from ...

Despite exhibiting remarkable growth, the green bond market still represents less than 1 percent of the global bond market. This paper identifies two challenges that might slow the adoption of green bonds and presents a menu of responses that policymakers, regulators, and public financial institutions can use to offset these challenges. Specifically, it explores two key dimensions: (i) the risk profile of the green bond instrument and (ii) the transaction costs associated with issuance of and reporting on green bonds. New approaches to risk design and technology-based approaches are essential to untap the potential of green bond markets, particularly in Latin America and the Caribbean and other developing regions. The incorporation of financial mechanisms such as covered bonds and guarantees can adequately address the risk of the issues, making the market more attractive for investors. Enhanced regulation and education and leveraging efficiencies of new technologies such as distributed ledger technologies can substantially reduce monitoring and reporting costs, while improving transparency in the use of proceeds and market integrity.

This report offers guidance on how to prepare regions and cities for the transition towards a climate-neutral and circular economy by 2050 and is directed to all policymakers seeking to identify and implement concrete and ambitious transition pathways. It describes how cities, regions, and rural areas can manage the transition in a range of policy domains, including energy supply, conversion, and use, the transformation of mobility systems, and land use practices.

"This book is a must read to understand the pitfalls of relying solely on financial innovation to solve the climate crisis." (Matthew Paterson, University of Manchester) "...an emphatic call for rethinking finance to advance a just energy transition" Mzukisi Qobo, Wits University) "A truly enlightening and empirically rich account of a green bond market that wasn't...." (Daniel Mertens, University Osnabrück) "...required reading for scholars of just transitions in the Global South." (Daniela Gabor, UWE Bristol) Funding low-carbon transitions to address climate change is one of the major challenges of our time. Green bonds have emerged as a powerful tool to enlist institutional investors' wealth for these transitions. But despite exponential growth in many parts of the world, the green bond market in South Africa has been stalling. This book grapples with this puzzle: It debunks some of the promises underpinning green bond markets globally and traces the manifold practices undergirding its promotion. It then identifies some barriers prohibiting the expansion of green bonds in emerging markets and zooms in on the depoliticizing tendencies a transition premised on financial innovation produces. In the last part, this work discloses the idiosyncratic political economic challenges of a fossil-based economy in transition and shines a light on the competing elements of a 'green' and a 'just' transition. In so doing, this book contributes important new qualitative insights into green bond markets-in-the-making and extends political economic scholarship on finance-led transition endeavors in emerging economies. Chapters 3 and 6 is available open access under a Creative Commons Attribution 4.0 International License via link.springer.com. Manuel Neumann is a Senior Policy Officer at the German Federal Ministry for Economic Cooperation and Development. He did his PhD at Kassel University and was a visiting scholar at Wits University in Johannesburg in 2018 and 2019. Beforehand, he worked in the development context in Geneva and Kathmandu and studied in London (M.Sc.), New Delhi, and Tübingen (B.Sc.). His research revolves around green financial innovation and the political economy of energy transitions in the global South.

A large financing need challenges climate-adjusted infrastructure in developing Asia, estimated at $26 trillion till 2030. This necessitates crowding-in private sources to meet financing, efficiency, and technology gaps. However, a lack of bankable projects is a major hurdle. This publication suggests one possible innovative financing approach. The Green Finance Catalyzing Facility (GFCF) proposes a blended finance framework for governments and development entities to better leverage development funds for risk mitigation, generate a pipeline of bankable green infrastructure projects, and directly catalyze private finance. The GFCF provides useful inputs for the current debate on mainstreaming green finance into country financial systems.

This report discusses key issues surrounding finance mobilisation for achieving Georgia’s climate change and green growth targets, and new investment opportunities for developing its capital market. The report focuses particularly on finance for climate change mitigation from various sources – ...

Financing Water Security and Green Growth offers a comprehensive overview of the innovative financial instruments and approaches available to implement water security and green growth initiatives at various scales and in different contexts. Robert C. Brears explores the use of a variety of public, private, and blended finance models to create climate-resilient water supplies, reduce water-energy-food nexus pressures, encourage water conservation and efficiency, and increase water reliability. He examines how these methods can decrease the costs and pollution associated with wastewater disposal, utilize natural processes to improve water quality, manage water quantity by restoring the hydrologic function of the landscape, and improve overall water governance. The book also provides in-depth case studies of the innovative application of financing tools to achieve water security and green growth in various locations of differing climates, lifestyles, and income levels, and identifies best practices.

The Asian Bond Markets Initiative (ABMI) was launched in December 2002 by the Association of Southeast Asian Nations (ASEAN) and the People’s Republic of China, Japan, and the Republic of Korea---collectively known as ASEAN+3 to strengthen financial stability and reduce the region’s vulnerability to the sudden reversal of capital flows. This paper also provides recommendations for addressing new sources of market volatility and other challenges within and outside the framework of the Asian Bond Markets Initiative.