Political Complicacies Keep Australia From Reaping Benefits Off The ‘Green Bonds’

The global market for what is known as the ‘Green Bonds’ is expected to treble past $100 billions in years to come as according to BNP Paribas, the France based Investment Bank, but the political scenario in Australia seems to be hampering the growth of the sector in the country to a considerable extent.

Earlier in the week Prime Minister Tony Abbott and Treasurer Joe Hockey ordered the Clean Energy Finance Corporation to refrain from investing in any new wind power project. This has led the international investors to warn the Prime Minister that the move may send out a negative signal to the world, about investment situation in Australia.

BNP Paribas Australia chief, James Gibson is, nevertheless, in positive mind over the prospects of the green bonds in the country despite the regulatory limbo and political unrest hovering over the investment scenario. He believes that the options of sustainable investment and the rising demand for renewable energy projects would attract investments towards green bonds in the long run.

"In the short term the regulatory uncertainty in Australia will make it harder for local companies to attract capital for green bonds, but in the long term what really matters to the value of any infrastructure asset is the strength of underlying demand," Mr. Gibson told the Sydney Morning Herald.

Last year, Stockland attracted the investor’s attention by introducing green bond worth €300 million to invest in Green Star Projects. The Green Star buildings emit 62 percent less greenhouse gases compared to the average buildings in Australia, which prodded the Green Building Council of Australia to enter into a collaborative venture with the Climate Bonds Initiative, based in London.

There is a growing willingness amongst the consumers to invest more in renewable and environment friendly projects. Side by side BNP Paribas Australia the other issuers of the bonds in the country are ANZ Banking Corporation, Property Group Stockland and National Australian Bank. Among the major buyers of green bonds are the U.S. insurance companies and the European pension funds.

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