Page 291 - Low Carbon Development in China and India
P. 291
step to promote individual behaviour change as well as incentivize
low carbon industries around energy efficiency and renewables. Box
2.2 depicts innovations around traditional financing.
Box 2.2: Green financing instruments in the Republic of Korea
For individuals, the principle is that every type of financing instrument offers the benefits
of higher interest rate on deposits, lower interest rate on loan, or other fee discounts
related to personal green activities. Green financing instruments for individuals include:
• Savings accounts
• Credit cards
• Funds
• Insurance
• Personal loans
Green finance for companies is about seven times that given to individuals in respect
to total loan size. The finance products are also mainly public products and include the
following:
• Ordinary loan
• Public loan
• Public guarantee
• Public fund
• Public insurance
Analyses show that green loans for both individuals and companies have witnessed an
increase in the period September 2009 to February 2010.
Source: Compiled from Oh (2011)
All in all, the two main—and almost only—ways of financing a green
project in India today are equity and debt. However, with the growing
need for green investments, no doubt, financial innovations including
issuance of guidelines by the central banking regulatory body will
contribute in stimulating financing for low carbon development.
Innovation in Financial Products
The Bombay Stock Exchange (BSE) has two indices to promote
investment that considers environmental sustainability and also
climate change considerations; these include the S&P BSE Greenex and
the S&P BSE Carbonex.
The Greenex, launched on February 22, 2012, is an index which is
licensed for the development of green financial products including
mutual funds, exchange-traded funds (ETF), and structured products.
It calculates the energy intensity of a company (total emissions upon
256 Low Carbon Development in China and India
low carbon industries around energy efficiency and renewables. Box
2.2 depicts innovations around traditional financing.
Box 2.2: Green financing instruments in the Republic of Korea
For individuals, the principle is that every type of financing instrument offers the benefits
of higher interest rate on deposits, lower interest rate on loan, or other fee discounts
related to personal green activities. Green financing instruments for individuals include:
• Savings accounts
• Credit cards
• Funds
• Insurance
• Personal loans
Green finance for companies is about seven times that given to individuals in respect
to total loan size. The finance products are also mainly public products and include the
following:
• Ordinary loan
• Public loan
• Public guarantee
• Public fund
• Public insurance
Analyses show that green loans for both individuals and companies have witnessed an
increase in the period September 2009 to February 2010.
Source: Compiled from Oh (2011)
All in all, the two main—and almost only—ways of financing a green
project in India today are equity and debt. However, with the growing
need for green investments, no doubt, financial innovations including
issuance of guidelines by the central banking regulatory body will
contribute in stimulating financing for low carbon development.
Innovation in Financial Products
The Bombay Stock Exchange (BSE) has two indices to promote
investment that considers environmental sustainability and also
climate change considerations; these include the S&P BSE Greenex and
the S&P BSE Carbonex.
The Greenex, launched on February 22, 2012, is an index which is
licensed for the development of green financial products including
mutual funds, exchange-traded funds (ETF), and structured products.
It calculates the energy intensity of a company (total emissions upon
256 Low Carbon Development in China and India
