ABAC - The Asia-Pacific Economic Cooperation (APEC) Business Advisory Council has called on emerging economies in the region to issue climate bonds pegged to a basket of currencies, to reduce the risk of exchange rate fluctuations when raising capital for the clean energy transition.

ABAC, comprising chief executive officers (CEOs) of businesses in the Asia-Pacific region, also proposed launching a pilot program to develop a voluntary carbon market (VCM) to accelerate the region's transition to a low-carbon society.

Speaking at a press conference on August 4, Mr. Hiroshi Nakaso, Head of ABAC's Finance and Investment Department, said that under the program, like-minded countries will conduct cross-border carbon credit transactions on a trial basis to identify problems and possible solutions.

In its list of proposals, ABAC calls on economies in the region to issue 10-year bonds with interest and principal payments tied to a basket of currencies. The proposals, presented at the ABAC meeting in Tokyo (August 1-4), underscore a growing awareness in Asia of the need for private-public cooperation to finance the energy transition. ABAC will present its recommendations at the APEC 2024 Summit in Lima, Peru, in November.

Asia is one of the regions most vulnerable to climate-related natural disasters. It also includes many economies that are dependent on fossil fuels or are vulnerable to currency market volatility, adding to the challenges of the energy transition.

HAPPY CHI