Governments can provide more incentives to boost private sector green investments, say Morgan Stanley's Imtiaz Ahmad and Climate Bonds Chair Sean Kidney in "A Climate Change Fix" in Trading Carbon magazine.
Climate Bonds Blog
I’m sitting in the 11th annual “Workshop on Greenhouse Gas Emission Trading” at the International Energy Agency in Paris. 100 very smart people from all over the world, sitting around a huge oval table in a slightly-too-warm, wood-paneled conference room across the road from the Eiffel Tower (yes, I’m looking at it now, so excitingly close!).
I've been privileged to be invited by the co-hosting International Emissions Trading Association. I’ve just finished my 10 minute (ok, it went to 15) pitch about issues involved in mobilizing bond markets to finance climate change solutions. Quite a few questions; encouraging (or maybe just polite).
The Climate Bonds Initiative, with WWF and the Global Canopy Programme, today published the "Unlocking Forest Bonds" report of a high-level workshop on tropical forest finance. The report argues for regional development bonds as an instrument to save forests.
> Read the press release below — and join the WEBINAR on 29 Sept.
Climate Change investment usually means 'mitigation' – clean energy to reduce power sector emissions, transport to shift away from oil, etc.
We've been working - with a bunch of others - on a project for the European Climate Foundation around finance for a transition to a low-carbon Europe. The report of that project has just been released. http://goo.gl/0PPYV
Some of the findings:
Earlier this week I sent you a note about our "LEEP" project to develop capital markets financing solutions for residential eco-refurbishment (energy efficiency + micro-renewables). It's a UK project at the moment, with plans to extend our work to other countries. Key features of the model are:
- Local Authorities facilitating and supervising local loan funds and service delivery for households.
- A mix of policy and service delivery solutions that will address barriers to eco-refurbishment being taken up by householders.
- Re-financing loan funds by issuing climate bonds designed to meet the needs of institutional investors.
The Climate Bonds Initiative has been working all year on developing a sustainable and replicable residential eco-refurbishment solution that attracts commercial capital at a national scale.
The Organisation for Economic Co-operation and Development (OECD) will next week publish a Working Paper on the "Role of Pension Funds in Financing Green Growth Initiatives".
The paper is part of their major Green Growth initiative and their Institutional Investors and Long-term Investment work.
We welcome four new members of Climate Bonds Advisory Panel, working to develop green debt capital markets:
Imtiaz Ahmad , Executive Director, Morgan Stanley Bank. Imtiaz was responsible for establishing the Morgan Stanley’s carbon trading and projects business; he is currently working on climate finance initiatives. He Imtiaz is a director of the International Emission Trading Association and a member of the UK Government’s Capital Markets for Climate Initiative.
1. The Southern California Public Power Authority is issuing a tax-exempt $159.4m project revenue bond to prepay for electricity from a wind farm.
The SCPPA is a non-profit “joint powers” agency of 12 public power utilities who come together to finance and acquire electricity generation projects, including many renewable energy projects.
Its model is to hold an undivided equity interest in the facility, issue tax-exempt debt financing to pay for the energy delivery, and sell 100% of the output to the interested members at cost.
This bond is the second; an 2010 bond for $237m (AA-/A1) won numerous 'deal of the year' awards.