Green Bonds And The Climate Crisis

Green Bonds Can Solve Our Climate Crisis

Miriam Tuork, August 28, 2019 (Forbes)

“…[T]he financial services industry still has a lot of work to do to assist in the global effort against climate change…[R]atings firm Moody’s announced that green bond issuance reached an all-time high in the second quarter of 2019. Investors are clearly aware of the challenges that we face from climate change, and green bonds have the power to finance our transition…Investment in renewable energy has increased by 55 percent in the last decade, but has stalled in recent years, even as energy demand has grown…[The first wave of renewable energy was easier to finance because it was in] large projects connected to large utility grids…[Today’s wave of renewable energy is] more distributed across sectors, geographies and industries…[N]ew business models and players are less easy for financial service companies…[Global demand for energy] is expected to grow by 25 percent by 2040.

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By midcentury, most of that growth will be driven by developing countries including Africa and South America, but predominantly in Asia…This shift in demand will have a significant impact on our climate…[But] low-carbon investment would need to grow two-and-a-half times by 2030…[Legacy carbon stocks in fixed income in 401(k) and other portfolios must be replaced by] the green bond and investment industry… Globally, utility companies were among the largest issuers of green bonds in 2017 and 2018…[but U.S. utilities with easier access to conventional debt] tend not to be very active issuers…There is significant ‘untapped potential’ in the utility market…[Connecticut Green Bank, Duke Energy, and Dominion Energy have stepped up but] U.S. utilities have the potential to issue at least $250 to $500 billion in green bonds…” click here for more

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