Green Bonds

Green Bonds have been promoted as a financial tool for development banks and countries across the Global South to access money for climate action. But as the new Global South debt crisis gathers pace, green bonds have contributed to difficult fiscal conditions in a number of countries. Debt, including green bonds, will continue to be important to facilitate transformative climate investment but it must be mobilized in less-extractive ways that allows the costs of debt service to be borne by those who contributed most to climate breakdown.  

• The structure of the global economy creates borrowing conditions for the Global South that are predatory and extractive, but access to debt is critical to pay for environmentally and socially beneficial projects.
• Green bonds are a key source of financing for climate-related spending; virtually identical to any other kind of bond, they have been widely issued by countries and multilateral development banks.
• Amid the Global South debt crisis and the ecological crisis, continuing to pile on debt– either through issuing new sovereign debt or rent-seeking on lending by multi-laterals is hardly a just response to either crisis.