Unlocking Climate Finance: APEC Business Leaders Advocate for Currency-Indexed Climate Bonds
Call for Emerging Economies to Lead the Charge
By The Asia-Pacific Economic Cooperation (APEC) Business Advisory Council
Tokyo, Japan - In a groundbreaking move, Asia-Pacific business executives have issued a clarion call to emerging economies in the region to issue climate bonds indexed to a basket of currencies. This innovative proposal aims to unlock substantial climate finance and support the region's transition to a low-carbon future.
The proposal emerged from a recent meeting of the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC), a group of private sector leaders who provide policy advice to APEC economies. ABAC members recognized the urgent need for climate action and the potential for climate bonds to mobilize private capital into sustainable projects.
"Climate change is a global challenge that requires bold leadership and innovative solutions," said ABAC Chair Rachel Barrie. "Our proposal for currency-indexed climate bonds is a game-changer that can attract investment from a wider pool of investors and spread the financial burden across a diverse group of economies."
By indexing climate bonds to a basket of currencies, emerging economies can mitigate foreign exchange risk, making them more attractive to international investors. This would unlock a new source of funding for climate adaptation and mitigation projects, such as renewable energy, energy efficiency, and sustainable infrastructure.
ABAC members emphasized that issuing climate bonds is not merely a financial exercise but a strategic investment in the region's long-term economic prosperity. They believe that by embracing sustainable practices, Asia-Pacific economies can position themselves as global leaders in the green economy and create significant job opportunities.
The proposal has received widespread support from the business community and is expected to be discussed at the upcoming APEC Economic Leaders' Meeting in November 2023. If adopted, it could pave the way for a significant expansion of climate finance in the Asia-Pacific region and accelerate the transition to a more sustainable future.
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