New York City Comptroller Scott Stringer wants the city to issue environmental, or green bonds, as part of its $30 billion-plus debt package over four years. "The dire effects of climate change—from rising sea levels and drought to extreme storms and economic disruption— has focused worldwide attention on the need to make our planet more resilient and sustainable," Stringer
The Mayor's Office of Management in Mayor Bill de Blasio's administration must review the proposal.
Earlier this week, Mayor Bill de Blasio announced new green buildings plan that would call for more than $1 billion in capital for making city-owned properties energy efficient. The mayor's office plans to incorporate the initiative into its upcoming 10-year capital plan. "The de Blasio administration is deeply committed to a greener New York City, from an 80% reduction in carbon emissions by 2050 starting with our sweeping new buildings plan, to continuing to promote investment in NYC's green bonds," said OMB spokeswoman Amy Spitalnick. "We are reviewing the comptroller's proposal, and look forward to continuing to expand opportunities for socially responsible funds while protecting the long-term fiscal health of the city." The city's existing core borrowing vehicles - general obligation, Transitional Finance Authority and Municipal Water Finance Authority - would contain green bond maturities, said Stringer, which would benefit from underlying credit strength and market presence while attracting new investor interest.
"Green bonds belong in the city's portfolio of tools," said Stringer.
His announcement came amid a wave of green-bond issuance.
California priced $300 million of green GO bonds - upsized from $200 million - Tuesday.
The first U.S. municipal green bond came to market in 2013, when Massachusetts sold $100 million as part of a $600 million overall GO issuance.
This year, the New York State Environmental Sales Corp. sold $213 million of green bonds in June, and the District of Columbia Water and Sewer Authority issued a $450 million century green bond in July.
On Sept. 18, Massachusetts sold $350 million of green bonds as part of an overall $777 million GO sale.
Municipal green bonds account for 1.83% of Standard & Poor's Green Bond Index.
The World Bank in 2008 offered a fixed-income product dedicated to supporting climate change mitigation and adaptation projects in developing countries. To date, the World Bank has issued more than $6.4 billion of these bonds.
New York's four-year capital commitment plan for fiscal 2015 through 2018 totals $35.2 billion,
of which $26.6 billion, or 75.5%, is projected to be city funded, largely through bond sales.
The fiscal 2015 plan totals $12.8 billion -- $9.9 billion city-funded -- of which almost 98% is projected as attainable within the fiscal year.
