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More money is flowing into green energy than ever before. Here’s why

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Investors have been pouring more money than ever into renewable energies such as solar and wind. WSJ looks at how the pandemic, lower energy costs and global politics have driven the rally–and whether it can last.

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Why now?
Green energy investments have been increasing in recent years for a few reasons. First, the growing awareness of traditional energy sources' negative environmental and health impacts has prompted individuals, organizations, and governments to seek alternative and sustainable energy sources. This move has also been motivated by a desire for energy security. Second, technological advancements have made green energy more cost-effective and efficient, making it a more attractive investment opportunity. Third, government incentives, such as tax credits and subsidies, have also encouraged investment in green energy. Finally, the growing demand for clean energy from consumers and businesses has created a green energy investment market, further driving up the sector's growth.

Most scientists and climate activists agree that we will need to accelerate the adoption of renewables even faster to avoid the worst-case scenarios of the climate crisis.

Green Finance

Green finance refers to the financial products and services that are designed to promote environmentally sustainable investments and projects. It encompasses various financial activities, such as investment in renewable energy, energy efficiency, sustainable agriculture, and green infrastructure. Green finance aims to redirect capital flows towards low-carbon and sustainable projects, supporting the transition towards a more environmentally sustainable economy. This can include initiatives such as green bonds, which are debt instruments that finance environmentally beneficial projects, and green loans, which are loans with favorable terms that support investments in environmentally sustainable projects. The goal of green finance is to encourage investment in projects that generate not only financial returns but also promote sustainable and responsible environmental practices.

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