"Aren't taxes fairer because bonds reward those who have spare cash they don't need much right now?"
In fact this isn't the case - taxes are not fairer because they ask current taxpayers to pay for developments that will deliver much cheaper energy costs to future consumers.
Bonds are a mechanism for averaging out over time the charges to pay for stuff that requires mostly up front cost and has minimal operating costs. Like most renewable energy.
Bonds will largely NOT be bought by mums and dads with savings (well, maybe some will), they'll mainly be bought by pension, insurance and sovereign wealth funds who have the money now but are spending it on carbon-era projects. It's about switching capital, not asking for more. The idea is to squeeze the carbon-era projects of all their capital by giving investors good reasons to switch it all over to low-carbon investments.
Long-term investors like pension funds actually need more long-term debt to ensure they'll be able to pay out pensions when required. In the US many pension funds are moving their portfolios from about 20% bonds to 80%+ bonds, because the crash has shown that equities are just too volatile when you have to ensure payouts. That's why the Greek Government's EUR10 billion bond this week sold out despite jitters about the government's finance. There is a very big demand for bonds that will go on for some years.
Bonds will largely NOT be bought by mums and dads with savings (well, maybe some will), they'll mainly be bought by pension, insurance and sovereign wealth funds who have the money now but are spending it on carbon-era projects. It's about switching capital, not asking for more. The idea is to squeeze the carbon-era projects of all their capital by giving investors good reasons to switch it all over to low-carbon investments.
Long-term investors like pension funds actually need more long-term debt to ensure they'll be able to pay out pensions when required. In the US many pension funds are moving their portfolios from about 20% bonds to 80%+ bonds, because the crash has shown that equities are just too volatile when you have to ensure payouts. That's why the Greek Government's EUR10 billion bond this week sold out despite jitters about the government's finance. There is a very big demand for bonds that will go on for some years.
No comments:
Post a Comment