As day four of COP26 gets underway, Plaid Cymru has called for a Welsh Green Bond to fund decarbonisation efforts.

The party's finance spokesperson, Llyr Gruffyd MS, said the move would encourage capital investment in projects that deliver environmental benefits for Wales.

Mr Gruffydd, who is attending COP26 in Glasgow today, said: “There is so much potential in Wales – in our landscape and our natural resources – and the key will be how we tap into that.

“A Welsh Green Bond would allow investment in our environment, economy, and infrastructure, and allow us to fund decarbonisation efforts."

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Gruffydd also echoed the call of his colleague, Plaid climate spokesperson Delyth Jewell, for Wales to seek fully devolved powers over energy and the crown estate.

“We must seek the powers necessary to fully realize the environmental and economic benefits of our natural resources," he added.

"Welsh Government must seek the full devolution of energy powers and powers over the Crown Estate.

“The resources of Wales should be governed by the government of Wales, for the people of Wales, and a Welsh Green Bond would allow us to retain a greater share of savings in Wales.”

The National Wales: Llyr Grufydd, Plaid Cymru spokesperson for finance. (Photo: Huw Evans Agency)Llyr Grufydd, Plaid Cymru spokesperson for finance. (Photo: Huw Evans Agency)

The Crown Estate manages the collection of UK land and assets owned by the British monarchy. The Estate owns and manages about 65% of the Welsh foreshore (the area that comes above sea level at low tide), and 27,800 hectares of Welsh land, around 1% of our total land space.

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Green bonds are financial instruments designed to raise money for climate or environment-related projects - such as renewable energy, clean transport or sustainable farming practices.

Investors purchase the bonds from the government, creating a pool of funding, and in exchange receive a fixed return on their investment until the bond expires. Some bonds also offer tax discounts for investors.

The National Wales: The UK Treasury says that money raised by the sale of Green Gilts will be used to fund zero-emissions buses and offshore wind. (Photo: PA)The UK Treasury says that money raised by the sale of Green Gilts will be used to fund zero-emissions buses and offshore wind. (Photo: PA)

Last month the UK government sold its own green bond, the "Green Gilt", which raised £10billion from investors. A second sale this month raised a further £6billion.

The practice of selling green bonds has exploded among governments and private companies in recent years, but while generally considered a progressive policy idea in theory, green bonds can become a tool for "greenwashing" if strict regulations are not placed on how and where the money is used.

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"Many green bonds lack transparency, and no effective taxonomy to define 'green' assets has emerged," wrote public policy researchers Mathew Lawrence and Laurie Laybourn-Langton in their recent book Planet on Fire.

A Climate Bonds Initiative report published in May 2021 noted that, between November 2017 and March 2019, only 77% of green bond issuers had published information on how the proceeds of the bonds' sales were allocated, and only 59% had measured and recorded the actual environmental impact of their green bond-financed projects. 

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