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Launch of public sector executive briefing: how to scale the green bond market

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Today we see the launch of an executive briefing for the public sector “Scaling Up Green Bond Markets for Sustainable Development” at the star-studded International Seminar – the Financial System, the Green Economy and Climate Change, organised by Febraban, the Brazilian banking association with UNEP and the Center for Studies in Sustainability of the Getúlio Vargas Foundation (GVces).

The Briefing is the first result of a partnership between the Climate Bonds Initiative, UNEP Inquiry and the World Bank Group that will produce a guide to practical options for policy makers to scale up green bond markets for sustainable development.

Key points include:

– The green bond market – bonds whose proceeds are used for green projects, most commonly climate mitigation and adaptation projects – is growing rapidly, with outstanding issuance at US$66bn in June 2015.

– This growth needs to be accelerated to keep pace with the climate challenge. According to the Global Commission on the Economy and Climate US$6.2 trillion of investment is needed annually for new low-carbon infrastructure, which countries must start building now if they are to limit the effects of climate change.

– Institutional investors have the capital and are ready to invest in green. At the UN Climate Summit in September 2014, institutional investors with US$43 trillion of assets under management made statements that they are looking to invest in climate change mitigation and adaptation.

– Bonds can provide the long-term, stable investment returns which institutional investors need, making them appropriate vehicles to tap into institutional investors’ large capital holdings at scale. Bonds are also an attractive financing tool for infrastructure projects, providing a potentially low cost and long-term source of capital.

Sean Kidney, CEO of the Climate Bonds Initiative, said:  “We need to see trillions going to green infrastructure investment if we are going to avoid catastrophic climate change. Public sector support is required, and indeed vital, given the immense scale of the investments required and the urgency with which they need to be made.”

“There is clear interest amongst policy makers to scale green bond markets. This briefing provides a simple guide to help the public sector to translate their interest in green bonds into action. It offers a range of specific actions for policy makers in both developed and developing economies.”

Nick Robins, co-director of the UNEP Inquiry, said: “Building green bond markets will help policy makers, regulators and public financial institutions meet their infrastructure investment needs, capital market development aims, and targets for climate action and environmental protection.”

“The potential opportunity of the green bond market has caught policy makers’ attention around the world – including in China, India, Brazil, Mexico and the EU. For example, China’s central bank has published a range of ambitious policy proposals for green bonds, with official green bond guidelines currently under development. In the EU, supporting green bond standards is included in Capital Markets Action Plan.”

Alison Harwood, Global Practice Manager, Finance and Markets Practice, World Bank Group, said:  “The climate agenda is clearly a critical one for emerging market countries as is building bond markets to support rising demand for long term finance in strategic sectors, particularly infrastructure.  Given these overlapping goals, actions to develop green and broader bond markets can be done in tandem.   Policymakers should take into account steps needed to facilitate bond financing for green infrastructure as regulatory and other measures are put in place to enhance overall bond market growth–serving the ends of both agendas simultaneously.”

Recommendations for public sector action to scale green bond markets are divided into three categories – with the application and mix depending on country and macroeconomic context and policy priorities:

– Fundamental actions: establishing a green project pipeline; strengthening local bond markets; strategic public green bond issuance and developing green standards.

– Proven Support Tools: strategic public green bond investment; credit enhancement; tax incentives and developing instruments to aggregate assets and structure risks.

– Innovative Additions: adjusting risk weightings for green investment and preferencing green investments in central bank operations.

A full version of the Guide will be launched in November 2015 in time for the UN climate change conference in Paris. The project will also feed into an OECD report on green bonds, to be launched in 2016.

The Executive Briefing can be downloaded here.

Energy

7 New Technologies That Could Radically Change Our Energy Consumption

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Energy Consumption
Shutterstock Licensed Photo - By Syda Productions | https://www.shutterstock.com/g/dolgachov

Most of our focus on technological development to lessen our environmental impact has been focused on cleaner, more efficient methods of generating electricity. The cost of solar energy production, for example, is slated to fall more than 75 percent between 2010 and 2020.

This is a massive step forward, and it’s good that engineers and researchers are working for even more advancements in this area. But what about technologies that reduce the amount of energy we demand in the first place?

Though it doesn’t get as much attention in the press, we’re making tremendous progress in this area, too.

New Technologies to Watch

These are some of the top emerging technologies that have the power to reduce our energy demands:

  1. Self-driving cars. Self-driving cars are still in development, but they’re already being hailed as potential ways to eliminate a number of problems on the road, including the epidemic of distracted driving ironically driven by other new technologies. However, even autonomous vehicle proponents often miss the tremendous energy savings that self-driving cars could have on the world. With a fleet of autonomous vehicles at our beck and call, consumers will spend less time driving themselves and more time carpooling, dramatically reducing overall fuel consumption once it’s fully adopted.
  2. Magnetocaloric tech. The magnetocaloric effect isn’t exactly new—it was actually discovered in 1881—but it’s only recently being studied and applied to commercial appliances. Essentially, this technology relies on changing magnetic fields to produce a cooling effect, which could be used in refrigerators and air conditioners to significantly reduce the amount of electricity required.
  3. New types of insulation. Insulation is the best asset we have to keep our homes thermoregulated; they keep cold or warm air in (depending on the season) and keep warm or cold air out (again, depending on the season). New insulation technology has the power to improve this efficiency many times over, decreasing our need for heating and cooling entirely. For example, some new automated sealing technologies can seal gaps between 0.5 inches wide and the width of a human hair.
  4. Better lights. Fluorescent bulbs were a dramatic improvement over incandescent bulbs, and LEDs were a dramatic improvement over fluorescent bulbs—but the improvements may not end there. Scientists are currently researching even better types of light bulbs, and more efficient applications of LEDs while they’re at it.
  5. Better heat pumps. Heat pumps are built to transfer heat from one location to another, and can be used to efficiently manage temperatures—keeping homes warm while requiring less energy expenditure. For example, some heat pumps are built for residential heating and cooling, while others are being used to make more efficient appliances, like dryers.
  6. The internet of things. The internet of things and “smart” devices is another development that can significantly reduce our energy demands. For example, “smart” windows may be able to respond dynamically to changing light conditions to heat or cool the house more efficiently, and “smart” refrigerators may be able to respond dynamically to new conditions. There are several reasons for this improvement. First, smart devices automate things, so it’s easier to control your energy consumption. Second, they track your consumption patterns, so it’s easier to conceptualize your impact. Third, they’re often designed with efficiency in mind from the beginning, reducing energy demands, even without the high-tech interfaces.
  7. Machine learning. Machine learning and artificial intelligence (AI) technologies have the power to improve almost every other item on this list. By studying consumer patterns and recommending new strategies, or automatically controlling certain features, machine learning algorithms have the power to fundamentally change how we use energy in our homes and businesses.

Making the Investment

All technologies need time, money, and consumer acceptance to be developed. Fortunately, a growing number of consumers are becoming enthusiastic about finding new ways to reduce their energy consumption and overall environmental impact. As long as we keep making the investment, our tools to create cleaner energy and demand less energy in the first place should have a massive positive effect on our environment—and even our daily lives.

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Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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