Bank of England's Carney calls for progress on green bonds
BERLIN (Reuters) - Bank of England Governor Mark Carney called for faster development of green bond markets to reduce climate change risks for the world economy and urged Germany to use its presidency of the Group of 20 economies in 2017 to make progress. Carney said total issuance of so-called green bonds -- for example, to help finance water or renewable power projects aimed at reducing carbon emissions -- could double in 2016 from last year's $42 billion. But they still only represented 1 percent of holdings by global financial institutions, he said. "The development of this new global asset class is an opportunity to advance a low carbon future while raising global investment and spurring growth," Carney said in a speech in Berlin on Thursday. Authorities were working with the private sector to develop standard terms and conditions for green bonds, he said. "The G20 -- whose members account for around 85 percent of global emissions -- has a unique responsibility," Carney said. "The German presidency could be decisive." As well as running the BoE, Carney is head of the Financial Stability Board (FSB), which coordinates financial regulation for the Group of 20 countries including the United States, China and most of the world's other big economies. Carney has previously warned of the risks of climate change for the finance industry, including from the possibility that the majority of fossil fuel reserves might not be recoverable as governments push to limit global warming. In his speech on Thursday, Carney said that by encouraging greater capital flows to carbon-intensive developing nations, central banks in rich countries could gain more traction over their own economies via higher interest rates. Carney said global growth had "serially disappointed" over the past decade, hurt in large part by low levels of investment. "As the 10th anniversary of the start of the crisis approaches, a consensus is growing that escaping this low-growth low-inflation trap will require a rebalancing between monetary, fiscal and structural policies," he said. "The last are the most important," he said. (Writing by William Schomberg and Huw Jones; Editing by Catherine Evans)
