The Preferential Treatment of Green Bonds

Toward a green economy: the role of central bank's asset purchases

“…In the baseline scenario, we interpret the green and the brown good as different sources of energy, in line with Carattini et al (2021) and Giovanardi et al (2021). In this section, we interpret the green as the service sector and the brown as the manufacturing sector.…”

“…sector. FollowingCarattini et al (2021), we set ξ = 2; followingGiovanardi et al (2021), who target the renewable energy share in Europe in 2018, we set the weight of the brown good ζ to 0.8. In Section 4, we explore what changes when we interpret the two sectors as services and manufacturing.The parameters of the bonds' utility functions are specific to our model.…”

Climate Change Mitigation: How Effective is Green Quantitative Easing?

“…Analyzing elegibility events in the Eurosystem Collateral Framework they report that upon receiving the eligibility status of their corporate bonds, firms increase leverage and expand their balance sheet. Giovanardi, Kaldorf, Radke, and Wicknig (2021) study different degrees of preferential treatment of green corporate bonds within a DSGE setup, thus focusing on business cycle frequencies. They find a very limited climate change mitigating effect of such preferential treatments, which also come at the cost of an increase in entrepreneurial risk-taking.…”

The Role of Emission Disclosure for the Low-Carbon Transition

“…To do so, we build a structural DSGE model, thereby combining two strands of the literature: One on the transition dynamics of climate policies using DSGE models (see e.g. Diluiso, Annicchiarico, Kalkuhl, and Minx, 2021;Carattini, Heutel, and Melkadze, 2021;Giovanardi, Kaldorf, Radke, and Wicknig, 2022), and an empirical one on the effects of carbon-emission disclosure, which has mostly looked at financing costs (see e.g. Bolton and Kacperczyk, 2021b;Kacperczyk and Peydró, 2021).…”

“…Our paper is related to an emerging literature on the macro-financial impact of carbon taxation. Closest in spirit are the contributions by Diluiso et al (2021), Carattini et al (2021), Giovanardi et al (2022) and Schuldt and Lessmann (2022), who develop multi-sector models with financial frictions and climate taxation. They show that transition shocks are amplified by financial frictions and study the implications for the role of central banks and macroprudential policies.…”