The emergence of green bonds as an integral component of climate finance in South Africa (original) (raw)

Abstract

One of the greatest challenges facing the global community is climate change. 1 Over many years, global leaders have embarked on various platforms in a concerted effort to combat climate change. 2 One of the key platforms has been the annual Conference of the Parties (COP)-a regular meeting in which climate negotiations and high-level political discussions have taken place. 2 In 2015, the 21st COP was the most important because 195 countries agreed to ensure that rising global temperatures do not exceed the safe zone of 1.5 °C, as it is forecasted that temperatures will continue beyond this value between 2030 and 2050 if no action is taken to combat climate change. 3 The parties further agreed that climate investments for countries are critical to make enormous transformational changes to reduce their greenhouse gases by scaling up climate adaptation and mitigation strategies. 3

Key takeaways

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  1. Green bonds have experienced 92% growth, reaching over USD200 billion in 2018.
  2. South Africa issued its first green bonds in 2014, raising ZAR1.46 billion from Johannesburg.
  3. The Green Climate Fund has committed over USD10 billion for more than 100 climate projects.
  4. Green bonds uniquely fund projects that directly yield environmental benefits, unlike traditional climate finance.
  5. Developing countries must enhance institutional capacity to effectively leverage green bonds for climate finance.

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