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Heidi Tuhkanen
Adaptation, Finance

Green Bonds: A Mechanism for Bridging the Adaptation Gap?

This paper aims to clarify the role of green bonds in financing adaptation and resilience.

Green bonds are often referred to as a potential contributor to filling the adaptation finance gap, specifically in terms of channelling private sector finance to adaptation. Less discussed, however, are the roles they play or could play in financing adaptation to meet those aims. Looking more closely at green bond data can help us to set more realistic expectations for the tool and identify ways to make it more useful for investing in adaptation and resilience.

The study finds that green bonds finance adaptation, but only to a very limited extent. The challenges linked to the use of green bonds to invest in adaptation are the same as those presented by other private sector finance tools.