KARACHI:
The United Nations Sustainable Development Goals (SDGs) Agenda for 2030 is focused on global economic growth with a sustainable approach to avoid future climate catastrophes. Global policymakers have also been compelled to focus on sustainability and environmentally friendly policies because of the continuous challenge of environmental degradation that is catalysing climate change.
Considering that global economic growth primarily depends on fossil fuel consumption, the consequent environmental plight in the form of climatic changes cannot be ruled out. However, several renewable energy solutions have been promulgated to reduce reliance on fossil fuels. Nonetheless, reaching the full potential of renewable energy resources is still a dream because of many technical and intermittency factors. For example, the industrial sector is mainly interested in reducing operational costs to increase profit. Implementing renewable energy solutions may reduce their profits because of installation and maintenance costs. Thus, they will not prioritise renewable energy.
One possible solution is to devise policies that promote financial instruments such as green bonds, which are dedicated to financing and re-financing green infrastructure and investments. Issuing these bonds will help ensure that environmental projects are funded sustainably. Green bonds are fixed-income instruments aimed at supporting ecological projects. They can finance various projects usually related to renewable energy, pollution prevention, ecological infrastructures, recycling, clean public transportation, etc. These bonds may also have several tax incentives to increase uptake and narrow the green finance gaps. To ensure that these instruments are compatible with religious leanings, financial consultants and experts must be utilised.
Intikhab Ulfat
Karachi
Published in The Express Tribune, July 16th, 2022.
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