Green Bonds: Quick Insight into One of the Most Implemented Sustainable Debt Instrument to Tackle Climate Change

The importance of climate change and its impacts on different areas has helped to increase the implementation of financial instruments that seek to mitigate or adapt future events. After Paris Agreement in 2015 a particular instrument started to gain momentum: Green Bonds are debt instruments which focus on financing only green projects and even when the need financial flows are higher than actual contributions, green bonds issuance has been breaking major milestones since 2007. Until June 2021, cumulative volume of green bonds was 1.6 trillion dollars, mostly coming from United States, China, and Europe. Countries are exposed to climate change risks despite its contribution to it however efforts from some regions such as Latin America or Africa are still very low. Also, an unorganized transition to a greener future could increase instability within prices, people, and natural resources.