Green Bonds: The Case for Bangladesh

Open Access
Author:
Towhid, Barisha
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Christoph Hinkelmann, Thesis Supervisor
  • Brian Spangler Davis, Honors Advisor
Keywords:
  • Green Bonds
  • Bangladesh
  • Climate Change
  • Green Finance
  • Developing Countries
Abstract:
The global issue of climate change is doubly detrimental for various developing countries around the world that are both climate vulnerable and economically vulnerable. This thesis explores whether green bonds, the most sophisticated instrument of green finance to date, can help one particular emerging economy Bangladesh. Bangladesh already has initiatives like the national Climate Budget, frameworks like the Bangladesh Climate Change Strategy Action Plan (BCCSAP) and funds like Bangladesh Climate Change Trust Fund (BCCTF). Through an analysis of the Climate Budget 2018-19, qualitative survey responses from United Nations Development Programme (UNDP) officials at the Ministry of Finance (MoF), and comparative case studies of India, China, Indonesia, Malaysia, Nigeria and Fiji, the paper concludes that Bangladesh should issue green bonds. This should be done by first forming institutional supports and consultations with institutions like the World Bank and drawing up of a Green Bond Guideline. Moreover, it is recommended that the bond be sovereign given the nascent state of the corporate bond market, and also be issued as an Islamic sukuk green bond given the prominence and framework of Islamic banking in Bangladesh. Mobilizing finance toward environmental projects will become increasingly important for climate-vulnerable, emerging economies over the coming years, and it is time we take forward-looking steps now that are informed by global needs.