Expert Hoping Green Version of Israel Bonds could Lead to Better Future

A world-renowned expert in risk and insurance in Israel has proposed that a special bond be issued by the world’s governments for raising the long-term cash. This is required by the countries in order to achieve the sustainability goals that all member countries of the United Nations had agreed on in 2015. Yehuda Kahane developed the idea and presented it last month at the UN Middle East and North Africa climate conference. He took inspiration from the Israel Bonds that had been used by the Jewish state for creating jobs and funding infrastructure projects during the first few decades of its existence.

Prof. Kahane has not only had executive research and teaching positions in Israeli universities, but has also done the same all over the world. He has become one of the thought leaders who are of the opinion that the current economy does not suit, as it is solely focused on earning maximum monetary profits. This is because there are environmental as well as social costs and benefits that have to be taken into consideration. Together with Yoram Lavi and Tal Ronen, he launched the YKCenter, which is aimed at helping businesses and other organizations in aligning their management practices and visions with the environmental and social needs of the future.

The 77 year old Kahane suffered from a huge stroke back in August 2019 and is still undergoing rehabilitation because of it. Therefore, he was not in attendance at the MENA event and Ronen was the one who presented the Bond idea. The targets established by the United Nations have been divided into 17 SDGs (Sustainable Development Goals). They highlight the environmental, social and economic character of the world to be created by humanity. These include ensuring responsible consumption, ensuring equal access to education and health, alleviating hunger and poverty and building sustainable cities. 

According to Kahane, the problem is that this requires massive investments and even the $30 to $40 trillion that governments spend annually is not enough to cover it. Furthermore, such investments benefitting society or the planet don’t attract private investors because they don’t offer the high returns that investors are after. Kahane believes that the necessary cash can be found in global pension entities, such as life insurance, pension funds and social security, as they have more than $100 trillion. The funds raised from selling the bond can be used by governments for creating green jobs and to shift to an economy that can ensure environmental protection and social justice. 

Moreover, the bond would also prove to be helpful for the social security, life insurance and pension industries because it would provide high yields (interest) and a stable income source. This would enable them to generate the kind of returns that can come in handy for paying pensions and other payments that have become difficult to do in a time of low interest rates. Kahane said that the long-term savings of the public would increase with these bonds and they would also be able to contribute to a better world. 

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