Tax-Based Incentives Such As Tax Credits or Equivalent Direct Subsidies Can Both Attract Capital From

1.
Specific Hypothesis
Ho
Ha
2. Specify Test to be used
N<30= T-Test
n>30; z Test
3. Specify level of significance

95%
4. Calculate Test
5. Decision Rule
If T<Alpha
Reject Null Hypothesis
T-Test Types
a) Independent T-Test
b) One Sample T-Test
c) Paired T-Test
SPSS
Mean value of table 1 was compared to t-value and sig. (2-tailed) i.e. p value of 2nd table
Refer ppt
[email protected]
Future Prospects of green bond
Central and local governments, regulators, and central and development banks are taking measures
to scale up green bond markets. Following are some that can pump up the green bond market:
Tax-based incentives such as tax credits or equivalent direct subsidies can both attract capital from
investors and reduce financing costs for issuers. Tax incentives for bonds financing green buildings as
well as renewable energy projects are present in the US. China has proposed tax incentives for
labelled green bonds specifically but has yet to follow through. Various countries have incentives for
infrastructure financing, which could be transferred to green infrastructure investments.
Credit enhancement or guarantees from governments and development banks can support access
to low-cost capital in debt markets for companies that promote new technologies or are located in
countries with low credit ratings. An example of credit enhancement is the Asian Development
Bank’s backing of a certified Climate Bond issued by the Philippine firm AP Renewables. OPIC and
USAID also offer credit enhancements for green projects.
Green securitisation facilitates the flow of capital to smaller projects or entities which do not have
access to the bond market. While the majority of green bonds have been senior unsecured, a small
but growing portion of the market is in asset backed securities which currently make up 5% of
annual issuance. Public entities can work to promote securitisation of green loans. The Climate
Aggregation Platform, launched at COP21 and funded by the Global Environment Facility (GEF), is
exploring options to promote issuance in emerging markets; and the IFC is developing a green
warehousing facility for Indian rooftop solar loans
Green bond indices, ratings and stock exchange segments that promote green bond trading are
increasingly available. Stock exchanges in London, Luxembourg, Oslo, Stockholm, Mexico and
Shanghai have developed requirements for issuers to be included in separate green bonds lists.
Luxembourg Stock Exchange has recently launched a Green Exchange dedicated to green financial
instruments. Rating agencies Moody’s and Standard & Poor’s have developed green bond rating
tools. The first climate-aligned green bond index, tracking the performance of labelled and
unlabelled green bonds in China launched in September 2016.
Cross-border investment in green bonds through international collaboration promotes market

harmonisation and helps to develop capability. Collaboration not only allows laggards to leverage
frameworks developed internationally but also connects projects in developing and emerging
countries which account for most of the financing need. Such projects will also be valuable to
Institutional investors in the US, Europe and Japan that are currently struggling to find yield in
depressed economies. The market is already witnessing some of these developments through the
emergence of green finance hubs such as London and Shanghai. The Green Infrastructure
Investment Coalition, launched at COP21, aims to connect green bond issuers to investors.
A number of more innovative tools have yet to be used in the green bond market but could be
explored by governments and regulators:
Preferential risk weighting from financial regulators could operate to reduce the risk weightings for
climatealigned investments. This policy has been used in the past to support other priority areas, for
example in lending to small and medium enterprises in the UK and in China. Alternatively, the risk
weightings of high-carbon investments could be increased if there is better disclosure on the
environmental performance of non-green bonds. A lower risk weighting for green bonds would also
enable investment from highly-regulated pension and insurance funds in a greater variety of issuers.
Preferential operations and loans from central banks to green could incentivise green bond
issuance and investment, spurring market growth. The People’s Bank of China has recently
announced that it may provide lowcost loans to banks to help them finance environmental
projects20. Targeting some reserves for green bond investment as carried out by the central bank of
Bangladesh, could also be an effective strategy. Central banks could explore providing targeted
liquidity-providing operations at a lower rate or including green bonds in asset purchasing
programmes and quantitative easing — Green QE. When exploring each of these potential areas for
action, central banks should make sure their actions do not crowd out private institutional
investment.
The future of the market
Investor demand for green bonds continues to be strong with high oversubscription rates being the
common. As companies continue to transition away from high-carbon assets and energy intensive
business practices, the use of green bonds to finance this transition will continue to be a driver for
issuance. With the strength of demand along with multilateral and sovereign support, we estimate
that the green bond market could reach USD 1 trillion of issuance per annum by 2020 to meet
climate needs. To place in context, the global bond market is estimated to be USD 100 trillion,
broadly split between government (49%), financial (39%) and non-financial (12%) issuers.

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2. Specify Test to be used

3. Specify level of significance

Future Prospects of green bond

Cross-border investment in green bonds through international collaboration promotes market

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