Out now! New report from California State Treasurer: Growing the US Green Bond Market: A Strategic plan from largest US state: Role model for Treasuries everywhere

California State Treasurer John Chiang launches new green bonds report. Seeking new sources of finance to lower emissions and fund climate-friendly infrastructure.  

First stage of California’s plan to boost acceptance and issuance of green bonds across the US.

 

What’s it all about?

Treasurer John Chiang has just released ‘Growing the US Green Bond Market: Volume 1: The Barriers and Challenges’ in a bold new move by America’s largest and most innovative state to lead on climate finance, green infrastructure funding and kick-start the US green bond market.

 

Green bonds: an infrastructure financing tool

The Treasury is coming at this partly from an infrastructure angle. They recognise the urgent need for massive infrastructure upgrades – green buildings, transport networks, energy grids and clean water systems, not just in California, but across the US – and also, that there is a critical need to ensure long life infrastructure is designed and built to be climate-friendly, adaptive and resilient.

 

The untapped potential for green bonds in the US is massive

While the US has enjoyed the leading global position in overall green bond issuance in the past, it was surpassed by China in 2016.

Moreover, green bonds in the US account for a much lower share of the overall bond markets than in Western Europe, China, India, and Latin America.

Less than one-tenth of one percent of bonds outstanding in the US are labelled green. There’s plenty of room to grow.

 

What does the report cover?

The report provides a comprehensive overview of the current state of the US green bond market, what’s holding back growth and what can be done to ramp up the market. It looks at five main areas:

  • market function, including supply, demand;
  • pricing;
  • standardization, third party review, disclosure, reporting;
  • refinancing and additionality;
  • policy issues.

 

John Chiang Treasurer State of California:

“I am determined to boost green bond issuance and acceptance both here in California and across the country. The challenge is to find a way to make bonds equally attractive to investors and environmentalists.”

 

Fantastic! A Blueprint for other Treasuries around the world to follow.

 

The broader green bonds plan: what's next?

The report will be followed by a large scale symposium in the latter half of this year to put practical solutions on the table. An action program will then follow, where the Treasurer’s Office will work with other stakeholders to foster market development, and “take the US green bond market to the next level.”

 

Where California goes... 

Comprehensive action on green bonds from California can play a huge role, not just for the US green bond market, but also globally: It’s America’s largest state economy and sixth largest in the world.

This leadership on green finance from the Golden State will have a ripple effect.

 

The Last Word

You can register for the Treasurer’s 2017 Green Bond Symposium here. Don’t miss it. Meantime this report will stimulate discussion and action across the US, as it should.

Or look for Treasurer Chiang delivering his key note speech later tonight at the 2017 Cleantech Forum in San Francisco. (5:45 p.m. Pacific Time /1:45 a.m. GMT)

Congratulations!

 

‘Till next time

Climate Bonds

 

Disclosure: John Chiang from the California State Treasurers Office is a member of the Climate Bonds Standards Advisory Board*, represented By Deputy Treasurer Alan Gordon.

*Disclosure: The CBSAB is an Advisory Committee to the Climate Bonds Board.

 

 

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

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