The Need for Green
How will the U.S. come up with the estimated $8 trillion necessary to replace fossil-fuel powered infrastructure with low-carbon alternatives?
How will California come up with the hundreds of billions more needed to replace and modernize its crumbling roads, bridges, water plants and other public works?
I believe the bond markets – and specifically “green bonds” – are an essential tool in answering these questions and raising the capital necessary to finance our transition to a more environmentally friendly economy.
And who better to lead this historic effort to curb global warming than California. With the U.S. already trailing China and Europe, California can fill the leadership void left by the current federal administration by facilitating the maturation of a domestic green bonds market that will pay for the new, less-polluting infrastructure we so desperately need to counter climate change.
In 2016, I conducted a multi-city listening tour where I met with three dozen of the nation’s most influential investors. Together, these investors control trillions of dollars in investable funds. They told me, repeatedly, that there are numerous barriers to shifting more of the funds they control to green projects. But they also insisted that these barriers are not insurmountable and a vibrant green bond market is within reach. They left us with a fresh trail of bread crumbs showing the way to a U.S. market that can operate at the same velocity and with the same vigor as our counterparts around the world.
So, what exactly are green bonds?
Green bonds are debt issued by either corporations or government agencies to finance climate-friendly or other environmental projects. Since their first issuance in 2008, green bonds have financed solar and wind power, reduced methane emissions, protected against floods, provided clean drinking water, and more.
The need for a green bonds symposium grew directly out of my listening tour and the lagging performance here in this country. The next step was clear: convene global leaders in climate science, public policy and the capital markets with the objective of forging actionable solutions to each of the barriers standing in the way of a robust, fully-functioning market.
To that goal, I am hosting California’s first Green Bonds Symposium with the Milken Institute, a Santa Monica-based public policy think tank that works to increase global prosperity, and Environmental Finance, a London-based publishing company that reports on green finance. The symposium will be held Feb. 27-28, 2018 at the Milken Institute.
Our focus is to come up with workable solutions that tear down the barriers for the maturation of the green bonds marketplace here in the U.S.
I am confident that by the end of our symposium we will offer up an actionable solution for financing a healthy, prosperous and enduring future for generations to come.
We hope you join us.
California State Treasurer John Chiang