Environment and Disaster Management › Climate negotiations and finance

Climate finance, carbon markets and carbon pricing

Climate money and the price of carbon: the funds and goals, green bonds and what may be counted green, and border taxes on carbon. Prelims has asked about carbon markets under Article 6 of the Paris Agreement and about a bond that funds both environmental and social projects.

Foundation note: India's carbon market: the Carbon Credit Trading Scheme

UPSC has asked

Prelims 2023: carbon markets as a tool against climate change

Showing 1 of 3 articles, those that changed from 1 to 31 August 2026.Show all

Sovereign green bonds

Prelims and Mains

A sovereign green bond is what a government sells when it borrows for a green purpose, such as a solar park, rather than for anything else.

Whether investors value the promise shows only in what they will pay for it.
Price and yield move inversely, so heavy demand for a bond lowers the yield the issuer has to pay on it.
The greenium is that discount measured against a comparable conventional bond of the same issuer and tenure.
India has issued these bonds since 2022 to 23.
Insurers drive the demand in India, because green bonds count towards their infrastructure investments.

What changed

15 Aug 2026New
- The 30 year bond of August 2026 drew the highest average greenium since issuance began.
- The discount has held steady across issues rather than fading, which the government reads as a demand signal rather than a saving.
The Hindu, 15 Aug 2026: Sovereign green bonds show a steady "greenium" (opens in a new tab)

UPSC has asked

Prelims 2026: the bond that funds both environmental and social projects