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BoC Lists A Green Bond On The Luxembourg Stock Exchange (LuxSE) As First Chinese Bank To Do So

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Bourse de Luxembourg

Today, the Luxembourg Stock Exchange (LuxSE) listed, and admitted to trading on its Euro MTF market, four green bonds issued by the BoC.

Under its US$20,000,000,000 Medium Term Note Programme the bonds were issued by BoC. The amount raised from the issuance of these green bonds will be used to finance projects that will promote pollution prevention, renewable energy, clean transportation and sustainable water management.

With a total issue amount of $2.8 Bn, the bond issue is made up of four different series:

· XS1437622621 U.S. $750,000,000, Floating Rate Notes due 2019

· XS1437622548 U.S. $500,000,000, 1.875 per cent. Notes due 2019

· XS1437622977 U.S. $1,000,000,000, 2.250 per cent. Notes due 2021

· XS1437623355 EUR 500,000,000, 0.750 per cent. Notes due 2021

BoC established its market leadership in the European bond market in 2014 with the ‘Schengen Bond’, becoming the first Chinese Financial Institution to list an offshore RMB Bond in Europe. With the present listing, BoC continues its Schengen Bond series as a first mover among Chinese Banks by becoming the first Chinese Financial Institution to issue a Green Bond on the European Continent and list on the LuxSE. Of equal importance, BoC demonstrates its commitment to Green Finance and environmental responsibility and sets a standard for the global Green Bond market with this listing, by becoming the first bank to list multiple Green Bond tranches simultaneously under a single programme.

This listing further confirms LuxSE’s position as the natural home of Green Bonds and LuxSE’s commitment to promoting the development of Green Finance and socially responsible investment. It demonstrates LuxSE’s capability to bring further scale to the Green Bond market and its strong commitment promoting the evolution of the Green Bond market in line with the industry best practices.

An event to mark this achievement was held by LuxSE in the presence of the Luxembourg Minister of Finance, Pierre Gramegna, Mr. Huang Changquing, Chinese Ambasador to Luxembourg and representatives of BoC and LuxSE.

Comments on the issue:

Julie Becker, Executive Committee Member of the Luxembourg Stock Exchange, said:

“Today we celebrate a tangible milestone in achieving our role in facilitating the financing of the global transition towards a low carbon economy. We welcome Bank of China’s entrance into this segment, and commend them for showing their leadership in capital markets innovation. LuxSE provides issuers with proven solutions for optimisating of Green Bond disclosure and investors with innovative assesment solutions. ’’

Mrs. ZHOU Lihong, CEO at Bank of China in Luxembourg said:

Today we reached another milestone in Bank of China’s Bond issuance history.

“Following the launch in 2014 of the first offshore RMB Bond by a Chinese entity in Continental Europe, the ‘Schengen Bond’, Bank of China Luxembourg Branch continued on this path by joining forces with Bank of China Head Office and successfully launched the ‘Green Schengen Bond’ on July 5th, 2016.

This represents the very first Green Bond issued by Bank of China and the first Green Bond offering from Asia to be made in Europe.

Despite the news about the ‘Brexit’ and the turmoil left in the financial markets, Bank of China succeeded to launch the biggest international debt sale of its kind, proving once again its attractiveness to and high recognition from professional investors.

The “Green Schengen Bond” is an excellent demonstration of Bank of China’s determination to promote the green bond market development in Europe through its Luxembourg branch and our bank’s strong wish to continuously support Luxembourg in it’s strive to remain the leading Green Bond listing centre.’’

Pierre Gramegna, Luxembourg Minister of Finance said:

“The Luxembourg Government is strongly committed to the double objective of assuming a meaningful contribution to the global fight against climate change and continuing the development of Luxembourg as an international hub for climate finance. As a leading financial center in the heart of Europe with a global outlook and well established market expertise, Luxembourg plays a pivotal role in the funding of green entrepreneurship, supporting the growing market for green bonds and ensuring appropriate transparency. The LuxSE is well prepared to assume its role as a trustful partner offering the necessary guarantees for issuers and investors with a scope on sustainable development.”

 

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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