August 27, 2018 - From the August, 2018 issue

Treasurer Chiang Signs Green Bond Pledge & Jointly Releases Green Bond Market Report With Milken Institute

At the recent Milken California Policy Summit in Sacramento, Treasurer John Chiang, in a fiery rebuke of the federal government’s withdrawal from climate investments, officially signed—the first state to do so—the Green Bonds Pledge. As Treasurer, Chiang manages a $75 billion investment portfolio, and is the nation’s largest issuer of municipal bonds. The Pledge is a simple declaration that all bonds that finance long-term infrastructure and capital projects need to address environmental impact and climate risk. In this TPR excerpt of Chiang’s remarks, he highlights how green bonds contribute to beneficial environmental and climate outcomes, and signal that these imperatives have been deliberately incorporated into the planning and deployment of infrastructure projects. The Treasurer’s Office also partnered with the Milken Institute to release the second volume of a report entitled Growing the U.S. Green Bond Market: Actionable Strategies and Solutions focusing on pathways for market standardization, defining green bonds, and streamlining pricing.

"I have a message for you today, Mr. President. You will not stand in our way. We can finance the large-scale transformation that must occur—that will occur—in California to combat climate change using green bonds.” —John Chiang

Thank you to the Milken Institute for the nonpartisan work you do on some very tough issues. I am especially appreciative—and proud—of the work we have just recently completed together.

I believe we are in the process of figuring out exactly how we can pay for the society-wide transformation that must occur if we are to successfully deal with the unassailable scientific fact of climate change and wean ourselves off the carbon economy that has proven to be so destructive to our families, our communities, the State of California, and all of the nations of the world that signed the historic Paris Agreement a mere three years ago.

Basically, when it comes to making the terms of the Paris Agreement operational and taking steps to save our planet only one national government has repudiated the science every other nation and virtually every scientist on the planet accepts regarding climate change. And the full responsibility for this wrong-headed and delusional rejection of climate change falls on the head of President Donald Trump.

President Trump may dial up his efforts to con the American people into believing climate change is a hoax created by the Chinese, but we Californians laugh at such lunacy because we know—without doubt or reservation—that the fate of the planet is at stake. Building critical public infrastructure and a future that does not depend on fossil fuels is now deadly serious business.

So I have a message for you today, Mr. President: You will not stand in our way.

The earth is experiencing one record year of high temperatures after another. All around us here in California wildfires are raging, destroying homes, ending lives. And each life of a firefighter lost, each child and elderly person who perishes in the flames, is a testament to extreme weather conditions related to climate change that President Trump refuses to acknowledge.

Here is why you will not stand in our way, Mr. President: We do not need you!

Because here is an effective and underutilized path to financing the large-scale environmental change urgently needed to correct against the destructive effects of accelerating climate change And here today, before this prestigious gathering of policymakers and top-level executives at the Milken Institute California Policy Summit in Sacramento, with my signature as the Treasurer of the State of California, California is proudly announcing that it is now the first state to sign the Green Bonds Pledge.

Under Governor Jerry Brown’s leadership, California will be hosting the Global Climate Action Summit in San Francisco in mid-September. At that time, Mr. President, I think it is safe to say you will see a whole lot more of what just took place. The summit will showcase actions—including the Green Bond Pledge—states and regions, cities, companies, investors, and individual citizens are taking to realize the goals of the historic 2015 Paris Agreement.

You will not stand in our way, Mr. President, because we don’t need you. You can lock down the federal government and gag the scientists at the EPA to silence official talk about global warming.

You can even attempt, and I emphasize attempt to lower California’s groundbreaking vehicle emissions standards – which amounts to a tone-deaf and foolish effort to turn the clock back and refill California’s skies with noxious gases that sicken our children and destroy our lungs.

Even with all that you attempt to do to destroy the good, the clean, the healthy, and the vibrant in California’s people and economy—for all that, Mr. President, you will not stand in our way. Because now we know we can finance the large-scale transformation that must occur—that will occur—in California to combat climate change, using green financing. By that, I mean specifically green bonds.


Green bonds can pay for new, climate resilient transportation systems, and clean and more drought resilient water systems. All who sign the Green Bond Pledge are in agreement that climate change poses an existential threat to our existence. The rapid growth of a green bonds market will not only meet the unique challenges the world faces, but will do so while making communities more economically competitive, prosperous, and productive.

The green bond market started modestly in 2007 with bonds issued by the World Bank and the European Investment Bank. By 2017, both California and New York had issued more than $4 billion in bonds to finance such things as clean water projects, green schools, mass transit, land preservation, and green housing. The treasurer’s office has handled more than $2.2 billion in green bonds for mass transit, clean water, and pollution control projects, green buildings and more.

But these investments are miniscule when viewed against the nation’s needs. Nationally, we face an estimated $4 trillion dollar shortfall in meeting the gargantuan task of replacing or repairing our crumbling infrastructure.

In California, independent reports estimate the shortfall to exceed $400 billion over the next 10 years. As Diane just stated in her opening remarks, it takes quality infrastructure to support the health and prosperity of California’s many communities.

So we must get to work. We must build clean, green infrastructure that works in a new global economy and high-tech world. The Green Bond Pledge aims to help accelerate the growth of green finance and is one of the most exciting developments in the world of bond financing to occur in our lifetimes. It is a vital and irreplaceable opportunity in these dark days of climate change.

And let me thank the international climate finance and environmental groups that developed the pledge—including the Climate Bonds initiative, Mission 2020, the CDP, Ceres, Citizens Climate Lobby, the California Governor’s Office, my staff in the California Treasurer’s Office, Global Optimism, the Natural Resources Defense Council, and The Climate Group. Here, today, the Milken Institute and my office also are releasing the second of two ground-breaking reports on the green bonds market.

The first report—a copy of which is available to all of you here today resulted from a green bond listening tour I conducted in 2016, meeting with market experts and investors in Sacramento, San Francisco, Los Angeles, New York, and Boston to identify the barriers and challenges to growing the green finance market.

One of the recommendations in that first report spurred me in 2018 to work with Mike Milken and the Milken Institute think-tank’s blue-ribbon Financial Innovations Lab to develop actionable steps to create a green bonds market that is robust enough to take care of California’s, the nation’s, and the world’s “greening” of our infrastructure. The Innovations Lab went to work and produced the second of the two ground-breaking reports on green bonds.

The new report is being released here this morning. The report issued today includes, among its suggestions, improving market standardization, defining what is green, and streamlining pricing. But that’s just the tip of the proverbial iceberg—the melting iceberg! Here is the conclusion of the report—and I hope you are listening, President Trump, because this is shorter than the length of a tweet:


You can’t hold us back from doing what needs to be done, Mr. President. Because we don’t need you.


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