Green bonds are relatively new and allow for conscientious investing The issuer needs capital to move forward. The holder receives interest and/or the principal. It is just like any other bond. However, they are tax-exempt bonds that fund environmentally sustainable projects. Green bond investments have grown more than tenfold from 2013, to an estimated $150 billion for 2017. With a B America!
Green Bonds for Energy Development
For me, the first type of project that comes to mind is renewable energy development, like solar panels and wind turbines. The state of Hawaii issued $150 million in green bonds in 2014 for such investment. However, there are many other projects, like pollution mitigation, energy efficient upgrades to infrastructure, and nature conservation initiatives.
Climate Change Adaption
Investments that may unfortunately become more commonly required are climate change adaptation ventures. Sea level rise may require municipalities to issue bonds that fund flood prevention systems. The city of Miami, FL is currently spending $100 million to raise roads and redirect water on La Gorce Island. Other climate change adaption projects could involve the migration of farms to more suitable lands. We are in an age of increasing social responsibility and need for sustainability. Green bonds provide an excellent service to both the holder and the issuer.
