Knowledge in Finance and Accounting on viden.io

Knowledge in Finance and Accounting

Reference material

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Finance and Accounting +1 more

Consulting Club, IIM Ranchi

finance

A look into what is Real Options through some basic numericals to give a more hands on experience.

Finance and Accounting

Finance Club, IIM Ranchi

Climate financing

Perhaps one of the most serious challenge that the global community as a whole faces today is that of the climate change. The average global temperature ride is on a steady path to cross the 2 deg. Celsius mark as compared to the pre industrial levels. To stop this from actually precipitating, the concept of climate financing becomes very important. Climate financing hence refers to financial aid for mitigation and adaptation activities to enable shift towards a low carbon and climate resilient growth. The main initiator in this regard has United Nations framework convention for climate change (UNFCCC). Under its aegis, global community has come forward to help each other out. Various climate funds have been launched at the behest of UNFCCC like Green Climate fund, special climate change fund, etc. The basic principle behind climate financing that UNFCCC proposes is that of historical responsibility that means the developed countries like the US, EU block, etc. which are substantially responsible for the present global warming are also financially liable to fund the path back to normalcy. This principle, however has been the most controversial as it has not gone down well the developed block. The commitments for financing were also reiterated during the COP 21 meet at Paris in December 2015. However, withdrawal of USA from this accord came as an absolute shocker to the global community. With the richest nation out of this financial ambit, doubts regarding the success of COP 21 have become strong. Apart from countries helping out each other, there are other mechanisms for climate financing. Carbon trading is one of the most popular of such mechanisms. Promoted by the obligations under Kyoto protocol, carbon trading has only grown in terms of reach. Polluting industries are made liable to buy carbon credits in order to offset the environmental deterioration on their part. The business community has also actively come forward with initiatives at their behest e.g. the Carbon pricing leadership coalition to expand the use of effective carbon pricing policies. The most recent addition in this area has been that of Green bonds. These are the bonds that are specifically issued to fund green projects. These are tax exempt and repayment is tied to the issuer, not the success of the projects.” This means the risk of the project not performing stays with the issuer rather than investor. Time line for green bonds in India: ·         In 2015, EXIM  bank launched India’s  first dollar denominated  green bond of $500 million. ·         In January  2016, SEBI also  released first Green  Bond guidelines relating  to listings, norms for raising money etc. ·         NTPC raised Rs. 2000 crores through issuance of green masala bonds in overseas markets. However, some challenges with regards to green bonds in India are- ·         Most green  bonds in India  have a shorter tenor  period of about 10 years ·         lack of viable and bankable projects owing to pricing issues ·         Standalone green projects such as rooftop solar still are unattractive to investors due to the small scale

Finance and Accounting +1 more

Finance Club, IIM Ranchi