Could ‘Green’ Bonds Help Tackle Climate Change?

[one...two...tree 2,762]

Delegates from across the world poured into Rio de Janeiro to attend the UN’s sustainable development summit to discuss how to tackle climate change.

One item on the agenda: Could the issuance of “green bonds” be part of the answer?

Investor interest for green bonds exists, but potential purchasers of such products are not being offered appropriate investments on a big enough scale.

Ben Caldecott, head of policy at investment manager and adviser Climate Change Capital, said that investors such as pension funds and insurers are interested long-term green bonds to match their existing liabilities.

He said:

“Green bond issuance is primarily from development banks such as the European Bank for Reconstruction and Development but I think this will become a relatively small part of the market as it matures.

“Utilities and banks, which need to deleverage their balance sheets, could securitize their renewable energy loans and issue asset-backed securities.”

Last month, the Climate Bonds Initiative issued a discussion paper advocating the creation of green-covered bonds.

The idea is that an issuer, typically a bank, could issue a “covered” bond that is secured upon a pool of renewable energy loans, perhaps loans to wind farms or solar panel manufacturers.

But many are skeptical about this kind of approach.

Christoph Harwood, a partner at environmental finance consultancy Marksman Consulting, said:

“Covered bonds provide the investor with dual recourse to either a bank or a pool of assets. The biggest unknown with green-covered bonds is not the issuer but the programmes underlying the bond. The problem with green bonds is that people treat them with a degree of caution.”

But where investors do trust the issuer, green bonds can prove to be pretty successful. Earlier this year, Warren Buffett’s Berkshire Hathaway issued an $850 million green bond to finance its $2.4 billion Topaz Solar Farm in California. Even though the bond got a BBB- rating from Fitch, it was still massively oversubscribed and prompted Berkshire Hathaway to increase its initial issuance from $700 million.

For investors willing to take the risk, the rewards can be handsome. Berkshire Hathaway’s green bond gave investors a healthy 5.75% coupon. Green bonds issued by the World Bank in recent years have offered investors returns ranging from as little as 0.5% to as high as 6%.

Further reading:

Bond Markets Could Head to the Rescue of Climate Change

http://blogs.wsj.com/source/2012/06/26/could-green-bonds-help-tackle-climate-change/

[mawilson 2,133]

Green bonds? Is that a new name for junk bonds?

[Ban Hammer 13,348]

Green bonds? Is that a new name for junk bonds?

they're biodegradable.

[Teddy B 17,252]

The two things that I find amusing about global warming/climate change:

1. How many people are so gullable to latch on to something and attempt to force the entire world's population to follow along with them, all the while knowing that there is no viable proof it even exists.

2. To have the audacity to think that there is something they could do to stop it even if it did exist.

[one...two...tree 2,762]

The two things that I find amusing about global warming/climate change:

1. How many people are so gullable to latch on to something and attempt to force the entire world's population to follow along with them, all the while knowing that there is no viable proof it even exists.

2. To have the audacity to think that there is something they could do to stop it even if it did exist.

Why do you hate science?

[Teddy B 17,252]

Why do you hate science?

I think science is great! Scientific fact is even better! Manipulation of science for personal gain is very bad however.

[one...two...tree 2,762]

I think science is great! Scientific fact is even better! Manipulation of science for personal gain is very bad however.

What about Scientific Theory? And are you suggesting that the bodies of science who have concluded that man-made Global Warming is real are doing so for financial gain?

[Teddy B 17,252]

What about Scientific Theory? And are you suggesting that the bodies of science who have concluded that man-made Global Warming is real are doing so for financial gain?

Scientific theory is usually also great, it's usually what leads up to a scientific fact. But when scientific theory, especially known faulty scientific theory is manipulated for personal gain, then no, that type of scientific theory is not good at all.

[one...two...tree 2,762]

Scientific theory is usually also great, it's usually what leads up to a scientific fact. But when scientific theory, especially known faulty scientific theory is manipulated for personal gain, then no, that type of scientific theory is not good at all.

Not really. Scientific theories are based on observable phenomena (facts). With the Theory of Global Warming, just like the Theory of Gravity, we know certain observable phenomena to be true or factual, such as Carbon Dioxide trapping solar radiation in the atmosphere, thereby warming the planet. We know there's a Carbon Cycle where naturally occurring CO2 goes through a process where it gets absorbed by things like plants and the oceans. We also know there's a maximum capacity for which those carbon sinks can absorb CO2 so that any CO2 in excess builds up into the atmosphere, further trapping solar radiation and warming the planet further. We know that the planet has gone through gradual periods of warming over tens of thousands of years. We know that fossil fuels produce CO2 and that the burning of those fossil fuels has increased exponentially in the last century. We know that the amount of CO2 in the atmosphere has increased in conjunction and we know the earth's temperature is rising.

So to dismiss the Theory of Global Warming as some kind of money-making scheme by the bodies of science who study climate is ignoring those observable phenomena. That would be like dismissing the Theory of Gravity.

[natty bumppo 297]

Scientific theories are based on observable phenomena (facts). With the Theory of Global Warming, just like the Theory of Gravity, we know certain observable phenomena to be true or factual

.....

So to dismiss the Theory of Global Warming as some kind of money-making scheme by the bodies of science who study climate is ignoring those observable phenomena. That would be like dismissing the Theory of Gravity.

of course scientific theory is never wrong ....even these scientific theories are still true ...

Spontaneous generation

Preformationism

Out of Asia theory

Emission theory of vision

Geocentric universe

Flat Earth

Four bodily humours

...

etc

etc

[Teddy B 17,252]

Not really. Scientific theories are based on observable phenomena (facts). With the Theory of Global Warming, just like the Theory of Gravity, we know certain observable phenomena to be true or factual, such as Carbon Dioxide trapping solar radiation in the atmosphere, thereby warming the planet. We know there's a Carbon Cycle where naturally occurring CO2 goes through a process where it gets absorbed by things like plants and the oceans. We also know there's a maximum capacity for which those carbon sinks can absorb CO2 so that any CO2 in excess builds up into the atmosphere, further trapping solar radiation and warming the planet further. We know that the planet has gone through gradual periods of warming over tens of thousands of years. We know that fossil fuels produce CO2 and that the burning of those fossil fuels has increased exponentially in the last century. We know that the amount of CO2 in the atmosphere has increased in conjunction and we know the earth's temperature is rising.

So to dismiss the Theory of Global Warming as some kind of money-making scheme by the bodies of science who study climate is ignoring those observable phenomena. That would be like dismissing the Theory of Gravity.

I did not dismiss the theory of global warming as a money making scheme, I dismissed it as faulty science that was manipulated for personal gain, whether that be grant money or notariety in the science world, either way the numbers were played with.

The planet earth has gone through normal cycles of temperature change, both warming and cooling, since the beginning of time. There is absolutely no evidence to prove the current warming trend is anything but that.

[Dakine10 5,452]

of course scientific theory is never wrong ....even these scientific theories are still true ...

Spontaneous generation

Preformationism

Out of Asia theory

Emission theory of vision

Geocentric universe

Flat Earth

Four bodily humours

...

etc

etc

I don't see global warming on that list. Perhaps we can add it as soon as some science becomes available to the contrary. Perhaps that will refute the overwhelming scientific concensus that currently favors the theory. Until then we can just continue to shoot the bull.

[Captain Oates 911]

I did not dismiss the theory of global warming as a money making scheme, I dismissed it as faulty science that was manipulated for personal gain, whether that be grant money or notariety in the science world, either way the numbers were played with.

The planet earth has gone through normal cycles of temperature change, both warming and cooling, since the beginning of time. There is absolutely no evidence to prove the current warming trend is anything but that.

The graph (chart) shows the RATE of increase to be unprecedented in the whole history of the earth

Does that make any difference to your position or would you prefer to ignore any science which weakens your closed book on this subject ?

I find it entirely persuasive though I love to use carbon energy and will be sad when I cant

The only scientific fact that matters is whether the rate of change is unprecedented. If it is true, then it's appearance at the same time as human industrialization is too much of a coincidence after 5 billion years

It is true

[one...two...tree 2,762]

I did not dismiss the theory of global warming as a money making scheme, I dismissed it as faulty science that was manipulated for personal gain, whether that be grant money or notariety in the science world, either way the numbers were played with.

The planet earth has gone through normal cycles of temperature change, both warming and cooling, since the beginning of time. There is absolutely no evidence to prove the current warming trend is anything but that.

But you're ignoring facts.

Fact - CO2 is a heat trapping gas

Fact - The earth's Carbon Cycle has a ceiling as to how much CO2 it can remove from the atmosphere

Fact - Fossil fuel emissions are adding more CO2 into the atmosphere than the earth's Carbon Cycle can handle

Fact - The earth's temperature is rising

Even a 3rd Grader with a basic understanding of science could reason that man-made Global Warming is real. There's no sleight-of-hand in those facts presented and the conclusion is obvious.

Secondly, while warming trends have happened in the past, they spanned over tens, even hundreds of thousands of years. The rise in the earth's temperature this time around is very sharp and continues to increase sharply. An overweight person can lose say 40-50 lbs over a several months and survive. However, if they tried to lose that much in just a week, their body would go into shock and they would die. Gradual vs. rapid. Huge difference.

[lostinblue 1,989]

But you're ignoring facts.

Fact - CO2 is a heat trapping gas

Fact - The earth's Carbon Cycle has a ceiling as to how much CO2 it can remove from the atmosphere

Fact - Fossil fuel emissions are adding more CO2 into the atmosphere than the earth's Carbon Cycle can handle

Fact - The earth's temperature is rising

Even a 3rd Grader with a basic understanding of science could reason that man-made Global Warming is real. There's no sleight-of-hand in those facts presented and the conclusion is obvious.

Secondly, while warming trends have happened in the past, they spanned over tens, even hundreds of thousands of years. The rise in the earth's temperature this time around is very sharp and continues to increase sharply. An overweight person can lose say 40-50 lbs over a several months and survive. However, if they tried to lose that much in just a week, their body would go into shock and they would die. Gradual vs. rapid. Huge difference.

What percentage of your retirement account

is in green bonds?