Green Bond Market : The Rise Of The Green Bond Market

The world economy is a very complex system; in the system harmful externalities disrupt capital flows and determine economic productivity. Most notable of these externalities is inadvertent global warming. Spending towards research and regulation of climate change at both the national and international level are very important in determining current and future business trends. Economists and scientists worldwide continuously debate the pros and cons of emissions reduction and what consequences can quickly follow. Though many have different views on the issue, all can agree that the immediate and long term effects of climate change have become an economic matter of paramount importance. The sweeping impact from climate change will have important fiscal, financial, and macroeconomic ramifications that influence global commerce standards.

The election of 2000 took place during a time that was mostly peaceful, unemployment rates were historically low, but however, there were a record number of terrorist threats (Muhlhausen). Despite all of these headlining topics presidential candidate Al Gore and Vice President Joe Lieberman were far more concerned about global climate change (“Al”). Gore was, and still, is very passionate about this topic (“Al”, 9). He has challenged the two biggest polluters in the world, China and The United States to, “Make the boldest move in climate change.” Figure 5

Countries around the world have agreed that to avoid potentially dangerous climate change, global warming stay below 2 degrees C. This means that every country, including Australia will need to significantly increase their efforts to reduce emissions. Currently, Australia’s per capita emissions are among the highest in the world, however, there has been recent progress in decarbonising its economy. For example, greenhouse gas emissions have remained stable while economy size has almost doubled. (Pathways to deep carbonisation).

There are 7.3 billion people on Earth (United States Census Bureau, 2016). More specifically, there are 7.3 billion people who depend on Earth for food, water, and shelter. If there is one thing that every living organism has in common, it’s our dependence on the planet to survive. Unfortunately, since the Industrial Revolution, humans have been systematically degrading the Earth and its resources. President Obama’s final State of the Union address was structured around four main points, one of which was centered around innovation (2016). His points focused on the impending reality of climate change and America’s potential to lead the world down a path of sustainability and green innovation. His hour long speech devoted a mere five minutes to climate issues, further suggesting that climate change remains a less pressing issue than the economy, for example, and I felt that he oversimplified an incredibly complex issue. President Obama’s economic appeals paint a hopeful picture without acknowledging the potential pitfalls associated with climate capitalism. However, President Obama’s strong stance claiming that climate change is in fact happening is an incredibly positive step in the fight against climate change.

This paper will address the institutionalized road blocks in the United States that have prevented successful climate change action for the last twenty-five years. First, the United States government has become increasingly influenced by and connected to private industries. The private industries and the government work together as partners. While this likely has been beneficial in some ways it has kept out innovation, competition and prevented the implementation of successful health and public welfare regulations. Second, the Banking, Energy and Media Industry are linked together to promote consensually agreed to messages. These industries work together to keep fossil fuels as our major energy source. Third, each industry works together in non-profit

Global warming, the cause of our ice caps melting and the sea levels rising. The G7 nations have come together to put a stop to these environmental issues by introducing a plan to stop the earth’s temperature rising by 2c. Decarbonising the world’s economy is the only way to stop an increase in the earth’s temperature and achieve net zero emissions by 2050. Climate works Australia and the Australian national university are leading the journey to a decarbonised Australia by 2050, with no major

With a stable currency and political harmony, it’s estimated that the gilt yields would sell for 0.75pc-1.65pc more than UK bonds (The Telegraph, 2014). However this would only be the case if Scotland achieved a stable currency, which initially would be very hard to do. The chance of higher returns on bonds may seem appealing to some investors, however there are risks involved, for example the savings may be in a weaker currency and could lose value when converting savings back into

The Australian emissions trading scheme (ETS) has been the hope of climate policy makers and environmental scientists alike to reduce the national carbon footprint. Replacing the implemented carbon tax law, the Australian ETS is a political issue due to the economic and social problems it entails. With the carbon tax being repealed recently by the current government, the comparison to the unpopular European Union ETS further emphasizes on its setbacks that it poses (Wood, 2010; Adams, 2014; Watkins, 2014). Hence a move to the ETS will be unlikely in the future.

In 2015, the carbon dioxide level in the atmosphere reached over 400 parts per million (ppm) for the first time in human history. This was recorded setting and spurred policymakers to do research themselves and read about climate change rather than just listen to industry reports and forecasts. After reading This Changes Everything, policymakers understood that the amount of carbon had to be drastically reduced in order to preserve the earth for future generations. One way to do so was to get off of fossil fuels, such as coal and oil, and get off them fast because the time to take action was quickly running out. The burning of these fuels releases carbon dioxide along with many other hydrocarbons into the atmosphere, where in turn, they trap heat trying to leave our atmosphere. The rise in

Across 800,000 years of data of Earth’s atmosphere, carbon dioxide levels at record highs, and being added daily, have already begun disrupting established climate patterns and damaging ecosystems upon which nearly all living things depend (CTC). Tremendous and rapid reductions of carbon emissions in the United States, and developed nations around the world, are essential to avoid runaway climate damage and minimize severe weather events. Inundation of coastal cities and islands, infrastructure destruction, failure of agriculture and water supply, forced migrations, political upheavals, and international conflict are among the devastating and costly side effects of climate change, many of which have already begun to be seen (CTC). Enacting a transparent and equitable tax on carbon dioxide emissions is imperative to hand over a sustainable Earth and habitable climate for future generations. A robust tax on carbon would provide compelling incentives to reduce emissions and pollution through conservation, substitution, and innovation (Sutter). The carbon tax is also a crucial policy tool for achieving the “Intended Nationally Determined Contributions” (INDC’s) to which the 193 countries that signed the Paris Climate Agreement in December 2015 committed to in effort to prevent global warming from reaching two degrees celsius above pre-industrial levels (CTC).

Carbon dioxide is the greenhouse most commonly emitted by human activities. While it is the least potent greenhouse gas in terms of global warming potential, CO2 is considered to be the greenhouse gas of greatest concern due to its long half-life and abundance in the atmosphere (Kahn, 2016). The current level in the atmosphere is 406ppm, the highest it has been in recorded human history (Overview of Greenhouse Gases, 2017). In an effort to mitigate the effects of global warming from a more economic perspective, market-based instruments are an appealing response to address the market failure of the negative externality of pollution. Levying a carbon tax is a promising method for limiting emissions; however, there exists challenges and its

The European Commission adopted on 16 April 2013 a proposal for a directive enhancing the transparency of certain large companies on social and environmental matters. This Directive amends the Accounting Directives (Fourth and Seventh Accounting Directives on Annual and Consolidated Accounts, 78/660/EEC and 83/349/EEC, respectively). The objective is to increase EU companies’ transparency and performance on environmental and social matters, and, therefore, to contribute effectively to long-term economic growth and employment.

The problem that exists in Pakistan under the current system is the lack of environmental information that could create a drive towards improvement. There exists the classic principal-agent problem with regulators needing good data about firm’s pollution levels, but the firms do not have a medium or drive of providing such information. This information asymmetry is addressed through introducing instruments such as the TRI or PROPER, which provides a platform for information collection and usage. It will indeed incentivise firms an incentive to improve their public image in the cheapest way available to them (Grafton et al, 2004).

Energy security, resource conservation, reduction of pollution and protection of natural habitats has got governments all around the world interested in carbon trading. Investor interest in the emerging global carbon credit market has created apt conditions for risk management products, ranging from insurance to derivatives. The carbon trading market allows polluting companies to pay others to cut carbon emissions on their behalf so as to meet the reduction targets set by Kyoto Protocol. A high volume of trading in the carbon derivatives market helps price discovery and liquidity, and in this way helps to set a clear price signal which helps businesses to plan investments.

Labeling and certification requirements vary, so a green procurement officer may think that he or she is doing the right thing by procuring a product which bears a “green” label and later learn that the product is not more environmentally responsible than that of a competitor, even though it is more expensive. Good procurement officers will investigate their sources with care, taking the time to confirm that the claims made by a company are accurate and comparing data from different sources to see which vendor is the best (Alsop and Post, 1995).