India's low carbon value chain, green debt, and global climate finance architecture

Abstract

The paper critically evaluates the bottlenecks inherent in India's low carbon value chain that is financed by green bonds and related debt securities. The paper identifies three cardinal limitations of the value chain viz. unviable carbon mitigation projects, insufficient market competitiveness of green bonds issued from India and the inability of refinancing institutions to securitise their liabilities and overcome the problem of asset-liability mismatch. It is argued that a climate financial architecture that overcomes these limitations provides important lessons to the ongoing global efforts to strengthen the financial mechanisms laid down by the Paris Agreement on Climate Change.

Keywords

• Carbon markets
• Green bonds
• Nationally determined contribution(s)
• Climate financing Architecture
• Securitisation
• Central Bank