Climate policy is economic policy.
Every $1 invested in resilience now saves an average of $6 in costs down the road in the form of property damage, economic disruption, and public health. In the face of increasing wildfires, flooding, droughts, and sea-level rise, that quickly adds up to billions of dollars in savings.
Washington STRONG authorizes a 10-year series of “green” bonds, which could unlock more than $16 billion for direct investment and has the potential to create upwards of 150,000 jobs. Demand for green bonds continues to outpace issuance, and this translates to record-low costs.
A conservative analysis conducted by a leading global financial institution demonstrates capacity for nearly $16.3 billion in aggregate capital over the first ten years. The analysis assumes (1) a starting price of $25/ton of CO2 with a 5% annual escalator covering 60% of statewide emissions, (2) a declining revenue stream as a result of meeting our HB 2311 emissions-reduction goals, (3) 10 years of bond issuances, each on a 20-year repayment timeline, and (4)15% of the revenue is dedicated to help low and middle income households offset the increased cost of fossil fuel use.
A price on carbon pollution provides the speed, scale, and security required to issue the bond against a clear line of repayment. This provides dedicated funding for community resilience AND frees up space in severely strained budgets.
The “green” certification directs the bond proceeds toward climate-related investments that increase our state’s economic resilience, they also prevent this revenue source from becoming General State Revenue or part of the state General Fund. Thus, it is not subject to the 9% debt limit. This is a closed-loop system designed to jumpstart the state economy with investments that will protect it for the long-term and enable sustainable growth by reducing our GHG emissions and increasing community and economic resilience.
Bigger piece in Sightline about green bonds here: https://www.sightline.org/2020/11/23/how-to-recover-washingtons-economy-without-the-waiting-on-the-feds/