Climate bonds (also known as green bonds) are fixed-income financial instruments linked with finding climate change solutions.
Why climate bonds (green bonds) are issued?
Climate bonds are issued to raise finance for climate change solutions. Climate change solution includes either climate change mitigation or adaptation related projects or programs. These might be greenhouse gas emission reduction projects ranging focusing on clean energy or energy efficiency, or climate change adaptation projects like building Nile delta flood defences or helping the Great Barrier Reef adapt to warming waters.
Is there any difference between climate bond and green bonds?
Though more or less similar, climate bond is an extension of the green bond concept. Green bonds are issued in order to raise the finance for an environmental project. Whereas, climate bonds are issued to raise finance for investments in emission reduction or climate change adaptation.