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Green bonds are amongst the financing options available to private and public entities to support environmentally friendly investments. The main attraction of green bonds is that they finance green projects and offer investors an income stream, assuming that the issuers do not default. However, green bonds are not without their problems. One of the problems with green bonds is the absence of an internationally accepted standard of what constitute green bonds. The absence of an internationally accepted definition has led to issuers and investors deciding what constitutes green bonds. The paper looks at the relationship between green bonds and climate mitigation, particularly whether green bonds can solve climate change mitigation and related issues. The paper contends that while green bonds are not a panacea for climate change, they can play an important role in reducing carbon emissions and thereby mitigate climate change.
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