Green Bonds?

November 5, 2013 - 15:46

Undoubtedly, as written in the Wall Street Journal, Ontario “Green Bonds” Could Spur Growth in Fledgling Market. Last week’s announcement by the Wynne provincial government was exciting - for a brief moment in time - before realizing that there was little to no detail connected to the announcement.

There are many who aren’t willing to give the Wynne Liberals the benefit of the doubt as a result of the gas plant scandal. As a non-biased individual with no political affiliation (In their own special way, I often disagree with each of the major political parties), I’m not one of those people. Still, it cannot be said that the Ontario Liberals haven’t remained committed to “green”. Sure, more could be done, and Gord Miller, Ontario’s Environmental Commissioner, will say the same thing. My point is that the idea of green bond issuance in Ontario falls in line with other actions the current administration has taken, including, but not limited to:

  1. Energy conservation incentives
  2. Renewable energy incentives (large and small scale)
  3. Reduction of coal for power generation
  4. Incentives for electric and plug-in hybrid vehicles
  5. HOV (high-occupancy vehicle) lanes
  6. Commitment to an eventual cap-and-trade system (this year, a discussion paper for input was posted by the    Ministry of Environment – but that was back in January and we’re getting a little tired of waiting!)

So why not green bonds? Well, the truth is, it depends on what the green bonds are funding. If the bonds are strictly used to fund infrastructure improvements for transportation then does the word “green” really apply? Will it be used to fund rapid transit, commuter train enhancements and rail expansion, or expanding networks for vehicle charging stations? Or will it be used to expand existing highways so more people can wait in traffic on their way to work, home, hockey practice or the store? Of course, there are other infrastructure improvements aside from transportation that can receive green bond funds, but for the sake of this blog I’m sticking with transportation.

It will be very interesting to see the green bond details that will be announced in the economic statement on Thursday (November 7, 2013) of this week. Hopefully the infrastructure improvements that will be earmarked for green bond funds will actually be green. One thing is for sure, the environmental impact reduction needs to be calculated and projected for each green bond-funded improvement. Otherwise, how will we know if it’s green?

Let us know by joining the discussion on our LinkedIn Group, our Twitter feed or just send us an message if you’re not the social media type.

Evan DiValentino, VP Sales & Marketing