Carbon Credits
Carbon credits play a crucial role in combating climate change by allowing companies to emit a specific amount of greenhouse gases into the environment. These credits can be traded on a carbon market via a carbon exchange, providing financial incentives for companies to decrease their emissions. This system promotes the reduction of greenhouse gas emissions, encourages investment in renewable energy and sustainable practices, and supports sustainable development through funding for clean energy, reforestation, and sustainable agriculture. Carbon credits also assist companies in meeting regulatory requirements by offsetting excess emissions and, by selling excess credits on the carbon market, companies that emit below their allotted amount can benefit financially.
Green Bonds
Green bonds are fixed income financial instruments that support environment- and climate-related projects. With a global market value of around $152 billion (Q2 2022), these bonds are often used with tax incentives to attract investors and are supported by the World Bank and many development finance institutions as a sustainable means of financing green projects.
Blue Bonds
Blue Bonds are a financing mechanism that supports a nation’s commitment to protecting at least 30% of its marine territory. This is achieved by repurchasing debt at a discount and refinancing it with better terms. The savings generated from this process are then used to fund conservation efforts, with the help of specialist organisations working with the government.