My name is Bond, Green Bond
My Clean Break column today talks about the idea of creating a green bond as a safe investment vehicle for Canadians that at the same time could raise money for large-scale renewable energy projects, enabling infrastructure and building-efficiency projects. The money would be distributed in the form of low-interest debt financing. Given the current credit crunch, now is perhaps the best time to launch a green bond as renewable energy developers face higher financing hurdles for their capital-intensive projects. At the same time, Canadians whose stock portfolios have been ravaged by the collapse of Wall Street — and the precipitous decline of the commodity-heavy Toronto Stock Exchange — could take advantage of green bonds as a safe haven with modest turns, at the same time knowing that their money is going toward building “green” infrastructure that both tackles climate change and creates jobs in a struggling economy.
Here’s a policy document put forward by five Action Canada Fellows who over the past year have actively promoted the idea to federal parties. So far, both the Liberals and the New Democratic Party have pledged to create a green bond if elected. Problem is they’re unlikely to get elected Oct. 14, and the Conservative government that will likely remain in power has rejected the idea (you can read why in the column). The proponents of the green bond plan to turn their attention to the provinces, specifically Ontario — and so they should. Now, more than ever, is the time to adopt such a financial instrument.
For my American readers, there is a precedent for selling green bonds. It’s certainly something that could be expanded.
Tags: finance, green bonds
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
