Paris’ green bonds, dubbed “climate bonds,” specifically target the financing of city climate action projects, with a first issuance worth $336 million.
In November 2015, just before the UN Climate Change Conference in Paris, COP21, the City of Paris launched the first-ever city “climate bonds” – a variation of green bonds that focus solely on securing finance for city government climate change mitigation and adaptation projects. The $336-million issuance of climate bonds makes it one of the largest issuances of green city bonds to date. By raising funds through green bonds, Paris is sending a clear signal to the market and instilling confidence in suppliers of green products and services.
100,000-500,000 metric tons of CO2 reduced per year through climate bond-financed projects
Cities100 – 2015
The bonds finance projects in the Paris Climate Action Plan that aim to reduce greenhouse gas emissions by 75% by 2050. Areas of action include renewable energy, building energy retrofits, mobility electrification, improved waste collection, water use demand management, and reduction of the urban heat island effect. Notable projects are a 20 GW per year retrofit of 200 schools, 300 charging points for electric vehicles, and the creation of a new electric bus rapid transit line, as well as urban farming and city greening programs.
The challenge
Prior to the introduction of climate bonds, more than $5.6 billion was invested in projects under the Paris Climate Action Plan through traditional bonds or loans. The climate bonds aim to persuade private and institutional investors to invest in the low-carbon economy by providing attractive rates and guarantees, while securing finance for Paris’ extensive investment in climate change adaption and mitigation.
Co-benefits
Economic To ensure investor confidence in the green bonds, and accountability in terms of results, a yearly audit will be published evaluating all supported projects.
Environmental All projects registered in Paris’ climate bonds will reduce CO2 emissions by a minimum of 30%.
Social Projects funded by climate bonds include the retrofitting of 25,000 social housing units, a goal of the Paris Climate Action Plan.
About Paris
Paris is the capital and most populous city of France, with an administrative-limits area of 105 square kilometres (41 square miles) and a 2015 population of 2,229,621. The city is a major rail, highway, and air-transport hub served by two international airports. Paris is especially known for its museums and architectural landmarks: its Louvre is one of the most visited art museums in the world.
