Comparative Analysis of Green Bond Regimes in Nigeria and China

Abstract

Climate change has taken the centre stage in the debate of most
governments around the world. At regional and international levels,
efforts are being made to manage the problems emanating as a result of
climate change. Response to the climate change can be summarized
under two headings, namely, adaptation and mitigation measures. These
measures do not come by cheaply, however. They are capital intensive;
hence private sector funds will be needed to fund these adaptation and
mitigation projects as public sector funding has remained insufficient.
One way to mobilize private sector funds to tackle climate change is by
using green bonds. But for green bonds to achieve its potentials as a
sustainable investment tool, there must be a solid regulatory framework
for the green bond market. Towards that end, this article analyses soft
law instruments as well as national green bond regulations of Nigeria
and China. It has been discovered that the Climate Bonds Standard and
the Green Bond Principles form the basis of most jurisdictions of green
bond regulations. nevertheless, due to regulatory arbitrage, there is no
consensus green standard, and this poses a governance challenge to the
green bond market. The article concludes that much of the responsibilities
in setting green standards and enforcement of green standards rest on
the domestic green bond regulations, and this can only be achieved
with water-tight regulations for green bonds at domestic levels.