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bonds issued by companies in the low carbon field, China has rarely
used special climate bonds. Therefore, the development financial
institutions of China can borrow the experience of multilateral financial
institutions on the international arena to issue climate bonds to other
financial institutions and institutional investors, in a bid to increase the
capital put into the climate change domain. In the future, acceleration
of investor participation and market expansion rely on three important
conditions: (i) standardization and third party certification; (ii) certain
scale to be met; and (iii) assistance of the public fund in enhancing the
rating of climate bonds. Climate bonds can play a role in providing
sources of fund for the local governments in developing the low
carbon economy. Firstly, by financing local low carbon projects via the
climate bonds issued by the central government or organizations and
secondly, financing the local low carbon projects via the climate bonds
issued directly by the local governments. Although these options are
relatively hard to be operated in China for the time being, they can
be proposed to policy-makers as medium-to-long-term policy options,
given the international experience and the popularization and constant
scale-up of the climate bonds at present.
Finally, what is worth noting is the fact that there is always relatively
little existing experience in the innovation of financial instruments. In
combination with the uncertainty of the low carbon growth projects in
terms of the technical and managerial experience, it adds to the risk of
investors. In an effort to effectively share the technical and managerial
experience in this area, the municipal government of Amsterdam
joined hand with local banks to set up the Green Finance Lab
(Box 2.2), with a view of promoting exchanges among different sectors,
driving low carbon investment, and lowering the risk of investment
effectively. We propose that China, too, establishes such a financing
platform to provide holistic support to both national and local low
carbon financing efforts.
Box 2.2:Green Finance Lab of Amsterdam
In an attempt to effectively promote exchanges of experience among various sectors
and lower the risk and cost of investment in the low carbon growth area, the municipal
government of Amsterdam joined forces with the Dutch bank ABN AMRO to have set
up the Green Finance Lab. As an important part of the sustainable development plan of
Amsterdam and of the Green Deal between the Amsterdam government and the central
government of the Netherlands, the lab is committed to exploring new forms of financing
for the purposes of helping Amsterdam successfully transform into a sustainable city
and providing a platform of exchange and cooperation for the public and private sectors.
102 Low Carbon Development in China and India
used special climate bonds. Therefore, the development financial
institutions of China can borrow the experience of multilateral financial
institutions on the international arena to issue climate bonds to other
financial institutions and institutional investors, in a bid to increase the
capital put into the climate change domain. In the future, acceleration
of investor participation and market expansion rely on three important
conditions: (i) standardization and third party certification; (ii) certain
scale to be met; and (iii) assistance of the public fund in enhancing the
rating of climate bonds. Climate bonds can play a role in providing
sources of fund for the local governments in developing the low
carbon economy. Firstly, by financing local low carbon projects via the
climate bonds issued by the central government or organizations and
secondly, financing the local low carbon projects via the climate bonds
issued directly by the local governments. Although these options are
relatively hard to be operated in China for the time being, they can
be proposed to policy-makers as medium-to-long-term policy options,
given the international experience and the popularization and constant
scale-up of the climate bonds at present.
Finally, what is worth noting is the fact that there is always relatively
little existing experience in the innovation of financial instruments. In
combination with the uncertainty of the low carbon growth projects in
terms of the technical and managerial experience, it adds to the risk of
investors. In an effort to effectively share the technical and managerial
experience in this area, the municipal government of Amsterdam
joined hand with local banks to set up the Green Finance Lab
(Box 2.2), with a view of promoting exchanges among different sectors,
driving low carbon investment, and lowering the risk of investment
effectively. We propose that China, too, establishes such a financing
platform to provide holistic support to both national and local low
carbon financing efforts.
Box 2.2:Green Finance Lab of Amsterdam
In an attempt to effectively promote exchanges of experience among various sectors
and lower the risk and cost of investment in the low carbon growth area, the municipal
government of Amsterdam joined forces with the Dutch bank ABN AMRO to have set
up the Green Finance Lab. As an important part of the sustainable development plan of
Amsterdam and of the Green Deal between the Amsterdam government and the central
government of the Netherlands, the lab is committed to exploring new forms of financing
for the purposes of helping Amsterdam successfully transform into a sustainable city
and providing a platform of exchange and cooperation for the public and private sectors.
102 Low Carbon Development in China and India
