Summary

Canada could be a renewable energy superpower – but our enormous natural resources (wind, tidal, wave, biomass) are grossly underdeveloped. Why? Simple: renewable energy is not yet price competitive. That will change over the long-term, as the cost of carbon increases and regulatory changes are slowly instituted.

The environment cannot wait. To address this market failure, we propose the creation of a Canadian Green Bond – a government-backed financial instrument designed to engage the public and accelerate Canada’s transformation into a renewable energy superpower by raising capital for green infrastructure and reducing risk for investment.

Just as Canadians purchased victory bonds during the Second World War, we believe Canadians will purchase green bonds to fight climate change. In a recent national poll conducted by SES Research, 81.8% of Canadians support the Green Bond initiative and 62.2% say they would purchase Green Bonds with an interest rate similar to a Canada Savings Bond.Like a Canada Savings Bond, the Green Bond would offer a government-guaranteed rate of return with little risk for the investor. The difference here is that all the money raised will be invested in renewable energy infrastructure in Canada.

The bond engages the public in a form of nation-building that will increase Canada’s national competitiveness in the long-term.

There are precedents for this type of initiative. In June 2007, the European Union issued their Climate Awareness Bond and raised one Billion Euros.

Above all, we believe Green Bonds will make for great retail politics. Millions of Canadians are asking themselves what they can do about the environment. Green Bonds will engage Canadians and represent a tangible symbol of the government’s efforts on the environment. The government’s release of Green Bonds will offer a compelling, feel-good narrative for the forthcoming budget.