The official sector is also being proactive, a critical factor if the necessary investment in achieving net zero is to be reached.
For example, the Bank for International Settlements (BIS) has launched green bond funds dedicated to helping finance investments in green projects in the Asia and Pacific region.
The latest Asian Green Bond Fund joins two other green bond funds issued by the BIS since 2019. Together, the funds will manage some $US3.5 billion in green bonds for central banks and other official sector investors.
The BIS said the new fund offers central banks, both in Asia and beyond, opportunities to invest in high-quality bonds issued by sovereigns, international financial institutions and corporates that comply with strict international green standards.
“These bonds help finance environmentally friendly projects in areas such as renewable energy production and energy efficiency in the Asia and Pacific region,” the bank said.
There is no doubt much uncertainty exists in the financing of a carbon reduction super cycle – including rigorous and consistent standards of reporting and investment. Equally though such a cycle requires innovation. Up to a point, those who adhere to a Panglossian “technology will save us” view of the world are right. But what technology?
The latest Green Future Index 2022 report by MIT Technology Review Insights provides insight into just one aspect of this challenge. It found the Asian region is well placed to generate the tech innovation required for a sustainable economy (although unfortunately Australia lags).
Europe continues to lead the way overall but in Asia, South Korea leads in patent creation relative to gross domestic product (GDP) and China and Japan lead in absolute patent numbers. South Korea produced 700 patents per billion dollars of GDP, while Japan produced 340, China 267 and the US 68.