economics hard MCQ

In the context of sovereign debt management, what is the primary objective of issuing 'Green Bonds'?

  1. To raise capital exclusively for funding environmentally sustainable and climate-resilient projects
  2. To provide tax-free returns to retail investors who invest in agricultural land
  3. To bail out loss-making public sector banks using environmental cess collections
  4. To hedge against the depreciation of the domestic currency in the forex market

Answer: To raise capital exclusively for funding environmentally sustainable and climate-resilient projects

Green Bonds are standard fixed-income instruments, but their proceeds are strictly ring-fenced for eco-friendly initiatives like renewable energy, clean transportation, and green buildings. By issuing Sovereign Green Bonds, the government taps into the massive global pool of ESG-focused institutional capital, signaling its commitment to climate goals while funding the expensive transition toward a net-zero economy.

Topic Banking - Financial Markets
Exam Relevance Banking, UPSC Prelims, SSC
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