OECD boosts so-called “Green Bonds” « Mining Blog

OECD boosts so-called “Green Bonds”

26. May 2011,

The OECD, in a 25 May 2011 report, concludes that “Green bonds” could raise hundreds of billions of dollars a year to spur a shift to cleaner economic growth, so long as governments set strong environmental goals, such as slowing climate change, and investing in “clean energies” such as wind and solar power.

The 34-nation group estimated the market size of all green bond issuances to date at around $11 billion, which it described as “a drop in the ocean” – amounting to about 0.012 percent of the capital held in global bond markets (estimated at $91 trillion).

Nonetheless, it pointed to a 24 percent rise in the number of patented inventions for renewable energies from 1999-2008; a 20 percent gain for patents for electric and hybrid vehicles; and an 11 percent gain for energy efficiency in buildings and lighting. Japan, the US and Germany led patent applications in clean technologies.

Reflecting a recent World Bank study, which attempted to price the “true wealth of nations”, the OECD urged moving beyond conventional yardsticks of gross domestic product (GDP) to include “non-market values” such as clean air and water, health and education or the diversity of animal and plant species.

It said that the costs of fighting climate change could be halved, on average, if the world were to place a monetary value on longer life spans created by moving away from high-polluting fossil fuels – claiming that US citizens would benefit most.

The conclusion that US citizens would benefit most from such changes is at first sight, startling: what about the billions of people living under far more straitened circumstances, suffering from far more, and a much greater number of, polluting industries? Not to mention the millions more directly threatened by adverse climate change?

This apparent anomaly illustrates one of the pitfalls of attempting to distinguish “non-market” values from “monetary” ones – as if one could, or should, try to price environmental and social resources which many would assert are literally “priceless”.

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