In a chapter for a new IFR Intelligence Report on Sustainable Banking, Sean Kidney, Christopher Flensborg, Alex Veys and Bryn Jones argue that the nascent environmental theme bond market heralds the arrival of a major class of theme bonds (climate bonds), as institutional investors and governments devote capital to a product which both fulfils risk/reward expectations and signals their de-carbonisation efforts to their member and voter stakeholders.
Climate Bonds Blog
True! See for yourself. OK, it's only $1 mil and backed by Lafarge and it's a bit publicity stunt; but it's an entertaining one.
The issuer is Novacem, a spin-out from Imperial College London that has developed a "carbon negative cement" that they claim will offer cost and performance parity with Portland cement.
(Thanks to Christoph Harwood for spotting it.)
A discussion paper released today by the Climate Bonds Initiative reviews experiences with State infrastructure banks in Europe and the US. The paper says that there are a wide range of financial engineering options that a Green Infrastructure Bank could use to to leverage public funds to support an increased flow of private investment into clean energy and climate change mitigation projects.
Commissioned by the UK Conservative Party, the report outlines the need and proposed risk mitigation role of a new Green Investment Bank, and how it would raise and invest funds. It includes an explanation of how Green Bonds could be used to fund the Bank and its activities.
The new UK Government, in its 2010 Budget, committed to setting up a Green Investment Bank in 2011.
Speaking in Brussels after a European leaders summit, Greek Prime Minister George Papandreou said that the leaders had discussed Europe putting forward new ideas to this week's G20 meeting in Toronto for, among other things, Green Bonds to fund new (presumably energy) infrastructure. No further details are yet available, but I for one am very keen to hear more ...
A report in PointCarbon this week suggests that the World Bank is considering a new issue of "carbon bonds", after a two-year pause in issuance.
The story quotes World Bank head of derivatives and structured finance, Ivan Zelenko, as saying “We are in talks with a number of countries and banks about issuing new carbon bonds” .
The Climate Bonds Initiative called today for the "greening" of the European Investment Bank (EIB). The call was in response to the EIB's push this week to become the main route for EU climate cash to the developing world.
Speaking in London's Canary Wharf, Climate Bonds Initiative Chair Sean Kidney said: "We support the bank becoming a conduit for European Union climate financing; climate investment banks will be a key part the financing of a rapid transition to a low-carbon economy".
IATD is concerned that the IETA proposal would transform global climate finance from what they call "a public fiduciary duty" of developed countries, to a new source of developing country debt to private creditors. Mind you this may happen anyway, given that Copenhagen Accord signatories are already saying the bulk of funding will have to come from the private sector - which will mean debt.
Two weeks ago we sent you a note about the release of an International Emissions Trading Association (IETA) discussion paper proposing a new international scheme of asset-linked green bonds tied to carbon credits. We welcomed that contribution to the debate.
Below for your interest is a comment on that paper from Climate Bonds Advisory Panel member Prof. John Mathews. John is Eni Chair in Competitive Dynamics and Global Strategy at LUISS Guido Carli University, Rome.
Please let us know what you think! Simply use the Reply box below.--------------------------------------------------------
FYR, this week will see two separate public lectures on ideas being promoted by the Climate Bonds Initiative, both on Wed 2 June. Feel free to let colleagues know.---------
In Stockholm, Advisory Panel member Prof. John Mathews, Eni Chair of Competitive Dynamics and Global Strategy at LUISS Guido Carli University in Rome, will be talking at the Stockholm Resilience Centre on:
“Climate Bonds: mobilizing private finance to drive an energy industrial revolution”
Time: 12.00 noon to 1.00 pm.Location: Library (Room 248), Stockholm Resilience Centre, Kräftriket 2b, Stockholm