Double Boost as Major Green Finance Report Released by Milken Institute
Congratulations to John Chiang, California Treasurer for signing up to Green Bond Pledge yesterday with a simultaneous release of the Milken Institute’s latest green bonds report, providing further momentum in the run up to the September Global Climate Action Summit (GCAS) in San Francisco.
The Green Bond Pledge was launched by ex-climate chief Christiana Figueres earlier in 2018, with the objective of opening up green finance discussions at a city, municipality and regional level, initially in the US, where climate action is mostly focused on subnationals.
Momentum
California is the world’s fifth largest economy and the new level of support for development of the green bonds market will have an positive impact in the US.
The Milken report ‘Growing the US Green Bond Market: Volume 2: Actionable Strategies and Solutions’ is the next in a series commissioned by the Treasurer with the first report released in early 2017.
The report highlights the nation's infastructure funding gap which is projected at USD4trillion.
Milken Report’s major recommendations are as follows:
- Establish a "Responsible Issuer Program" to support municipal issuers
- Facilitate a green bond insurance program to help debt-averse municipalities
- Create a green bond bank
- Evaluate the creation of taxable green bonds to increase yields
- Aggregate smaller issuances to attract larger investors
Who’s saying what?
John Chiang, California State Treasurer
“In California alone, we face a funding gap of over $400 billion over the next ten years to address our state’s infrastructure needs.”
“Green bonds are a financing tool that can help replace our existing infrastructure with greener, carbon-free alternatives. This report not only contains concrete and actionable recommendations that could make a thriving green market a reality, but which could also help us make great strides in the fight against climate change.”
Justine Leigh-Bell, Climate Bonds Director of Market Development
“Leadership at the subnational level will drive new investment in climate resilient infrastructure. By signing the Green Bond Pledge Treasurer Chiang is taking a positive step for California and signalling to other states and city leaders the future direction for borrowing programs and balance sheets.”
The Last Word
Treasurer Chiang’s signing of the pledge is a welcome boost for green infrastructure development.
Governor Jerry Brown and Treasurer Chiang are currently establishing a Green Bond Market Development Committee to implement a green bonds strategy to fulfil the commitments outlined in the Green Bond Pledge.
With the Global Climate Action Summit (GCAS) due to begin in mid-September 2018 and green finance high on the agenda, the Golden State is making its voice heard.
'Til next time,
Climate Bonds
