Asia-Pacific Economic Cooperation (APEC) businesses are paving the way for an innovative climate bonds network in the Asia-Pacific region.
A group of business executives, part of APEC’s Business Advisory Council (ABAC), have recognized the importance of utilizing climate bonds as a financial tool to support clean energy projects and combat climate change. These bonds will allow investors to finance projects that have positive environmental impacts while also generating financial returns.
The group of forward-thinking business leaders suggested that emerging economies should consider issuing climate bonds tied to a range of currencies to reduce the risk of currency fluctuations when raising funds for clean energy projects.
This innovative approach to financing green initiatives would provide greater stability and certainty for investors while also facilitating the flow of capital into environmentally friendly projects.
Relevant: OPIS Launches Asia-Pacific Carbon Market Report
Within the proposals put forward, ABAC recommended that governments in the area issue 10-year bonds with interest and principal payments linked to a variety of currencies.
These bonds would provide emerging economies with the opportunity to acquire foreign currency for purchasing solar farms and storage facilities. As Tom Harley, a task force project leader from Australia, pointed out, these bonds would help reduce risk for lenders by minimizing the impact of fluctuating exchange rates.
Additionally, the group proposed the launch of a pilot program to establish a voluntary carbon market in the Asia-Pacific region.
Read more: Singapore Launches Alliance To Boost Access to High-Quality Carbon Credits
Hiroshi Nakaso, who leads ABAC’s finance and investment task force, explained during a press briefing that their goal is to create a connected and interoperable voluntary carbon credit network in the Asia-Pacific region. This network aims to speed up the region’s shift towards a low-carbon society.
Nakaso mentioned that as part of this initiative, countries with similar goals will be able to engage in experimental cross-border carbon credit trades to pinpoint issues and work on potential solutions.
The group of business executives will present these suggestions at the upcoming APEC leaders’ summit in Lima, Peru, in November.