{"id":214321,"date":"2022-11-14T19:53:54","date_gmt":"2022-11-14T14:23:54","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=214321"},"modified":"2022-11-14T19:53:54","modified_gmt":"2022-11-14T14:23:54","slug":"green-yields-transparency-will-be-critical-for-green-bonds","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/green-yields-transparency-will-be-critical-for-green-bonds\/","title":{"rendered":"Green yields – Transparency will be critical for green bonds"},"content":{"rendered":"\n

Source<\/span><\/b>: The post is based on the article\u00a0<\/span>\u201cGreen yields – Transparency will be critical for green bonds\u201d <\/span><\/b>published in<\/span> the Business Standard <\/b>on\u00a0<\/span>14th November 2022<\/span><\/b>.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

Syllabus:\u00a0<\/span><\/b>GS 3 \u2013 Indian economy<\/span><\/p>\n

Relevance<\/span><\/b>: About India’s Sovereign Green Bonds Framework<\/span><\/p>\n

News<\/span><\/b>: Union government issued a robust framework for sovereign green bonds. This will allow the government to issue green bonds as announced in the Union Budget.<\/p>\n

What are Green Bonds?<\/span><\/h5>\n

Click Here to read<\/b><\/a><\/p>\n

About India’s Sovereign Green Bonds Framework<\/span><\/h5>\n

Click here to read<\/strong><\/a><\/p>\n

Funds<\/strong>: The funds raised by green bonds will be deposited as usual in the Consolidated Fund of India. However, a separate account will be maintained by the finance ministry to make funds available for green projects.<\/p>\n

Green Register<\/strong>: The Finance ministry will set up an information system to maintain a \u201cGreen Register\u201d with details such as the bond issuances, funds raised, and allocations made.<\/p>\n

Annual assessment<\/strong>: The government further intends to involve an external third-party reviewer to provide an annual assessment of allocation.<\/p>\n

What is the need for Sovereign Green Bonds Framework?<\/h5>\n

Need resources for India’s climate commitments<\/strong>: A report submitted to the United Nations Framework Convention on Climate Change showed that India\u2019s emission intensity declined by 24% between 2005 and 2016. It has committed itself to reduce the emission intensity of a gross domestic product by 45% by 2030 compared to the level of 2005.<\/p>\n

This would obviously need resources and investment in a variety of areas, and green bonds are one of the enabling factors for investment<\/p>\n

To take advantage of Greenium<\/strong>: \u201cGreenium\u201d is defined as the yield difference between similar conventional bonds and green bonds. It is higher in developing economies.<\/p>\n

For instance, according to estimates, greenium in emerging markets is about 49 basis points for dollar-denominated bonds. The same is 5-6 basis points in advanced economies. The difference can partly be explained by the usual yield difference between advanced and emerging economies.<\/p>\n

What are the challenges with Sovereign Green Bonds Framework?<\/h5>\n

a)<\/strong> A sustained higher fiscal deficit and inflation could undermine the potential of green bonds, b)<\/strong> India lacks transparency in the proceeds of green bonds, c)<\/strong> History shows that the government often doesn\u2019t spend on the stated purpose for which the funds are raised as is the case in various kinds of cess and surcharge levied.<\/p>\n

But the overall conditions in the framework should be able to boost transparency.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cGreen yields – Transparency will be critical for green bonds\u201d published in the Business Standard on\u00a014th November 2022.\u00a0\u00a0 Syllabus:\u00a0GS 3 \u2013 Indian economy Relevance: About India’s Sovereign Green Bonds Framework News: Union government issued a robust framework for sovereign green bonds. This will allow the government to issue… Continue reading Green yields – Transparency will be critical for green bonds<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-214321","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704752872},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/214321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=214321"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/214321\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=214321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=214321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=214321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}