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Analysis

Green finance heats up

THE OMFIF MONTHLY BULLETIN – Press Release

8 July 2017, London

Julyaug Bulletin Cover

At 33.9 degrees Celsius, 21 June was the hottest day in the UK since 1976, in a year that so far has been the hottest ever recorded. Earlier in June Donald Trump withdrew the US from the Paris climate agreement. Governments and the public have long debated the importance of climate change, but public and private investors too are getting the chance to invest more sustainably as the green finance market grows.

Bertrand de Mazières of the European Investment Bank (the first institution to issue a green bond) and Antony Karembu of the African Development Bank set the scene in this month's green finance-focused edition by exploring what it means to be green and tracking the development of the market. Robert Scharfe outlines the importance of building standards. Despite the lack of a fully developed market, our list of green-related deals of 2016-17 shows impressive expansion.

This growth will not be curtailed by the US withdrawal from the Paris agreement, according to 68% of respondents to this month's Advisers Network poll. One important area of expansion is Africa, where green bonds have the potential to transform the economy, writes Jeremy Wakeford.

Evelyn Hartwick of the International Finance Corporation draws attention to the challenges facing official institutions in supporting the development of the green market. Ulrich Volz highlights the importance of climate change to central banks in the light of potential risks to financial stability. Alexander Barkawi similarly argues why monetary policy should go green. Danae Kyriakopoulou applauds Dieter Helm's attempt to deploy economic principles in the area of conservation in her review of Natural Capital.

Other highlights of the July-August 2017 edition:

  • Banco Central do Brasil's Deputy Governor Tiago Berriel highlights the challenges but also opportunities from Brazil's changed economic and political environment.
  • Ben Robinson discusses the difficult choices facing the European Central Bank on the future of quantitative easing. Robinson also, in collaboration with Pawel Kowalewski of Narodowy Bank Polski, writes on how the world's major central banks will face a difficult task deflating their balance sheets.
  • David Marsh writes an obituary of former German Chancellor Helmut Kohl, and predicts the future of Jens Weidmann, head of the Bundesbank.
  • Danae Kyriakopoulou critiques Prime Minister Theresa May's insubstantial offer to guarantee the rights of EU citizens resident in the UK.
  • Jean-Jacques Barbéris outlines President Emmanuel Macron's plans to boost the French economy through technology and innovation.
  • Vicky Pryce reviews Adults in the Room, former Greek Finance Minister Yanis Varoufakis' account of euro area debt negotiations.
  • Donald Mbaka outlines the monetary policy priorities of the Central Bank of Nigeria.
  • Darrell Delamaide assesses the direction of US monetary policy and who might replace Janet Yellen as head of the Federal Reserve.

The Bulletin is available to OMFIF members, and to non-members on a subscription basis. To subscribe please contact membership@omfif.org.