Accelerating renewable energyfinance in Indonesia: The potentialof municipal green bonds
On average, the world experienced an economic contraction of -3.5% in 2020 due to COVID-193
, with developing countries bracing for higher impact. The unprecedented scale of this public health crisis has forced countries to disburse fiscal stimulus, which has reduced their fiscal capacity to finance long-term climate goals. In response, there are emerging attempts by governments around the world to
simultaneously address the health crisis and climate goals by including green recovery in their fiscal stimulus measures. However, there is room for improvement. For example, in Asia, research shows that countries are not doing enough to incorporate climate considerations into their fiscal stimulus responses.
Due to COVID-19, the financial resources needed to meet existing climate goals are likely to be large enough to require sovereign borrowing, such as through sovereign bonds. If a country has the capacity to take on more debt, then a bond issuance is a convenient way to mobilize financing. Other means such as raising domestic revenue or improving economic efficiency would take much longer to materialize.
Therefore, issuing sovereign bonds that produce a climate-beneficial outcome can be solutions for governments with adequate fiscal capacity to borrow, in times of decreasing government revenue caused by COVID-19. The green bond is a thematic debt instrument used to finance projects, assets, and activities
that support climate change adaptation and mitigation. These bonds can be issued by governments, municipalities, banks and corporates. Unlike normal or ‘vanilla’ bonds, green bonds must meet additional requirements to be labeled ‘green’. Consequently, the process for issuing green bonds is generally lengthier than issuing conventional bonds.
Temukan peta dengan kualitas terbaik untuk gambar peta indonesia lengkap dengan provinsi.
