What explains the emergence and diffusion of green bonds?

Monk, Alexander; Perkins, Richard

doi:10.1016/j.enpol.2020.111641

Cited by 41 publications

(20 citation statements)

References 99 publications

(116 reference statements)

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“…Using green bonds for financing purposes is a positive and cost-effective way than using traditional financing instruments or procedures. Our findings on green bonds are in line with Monk and Perkins (2020) and Maltais and Nykvist (2020). Green bonds provide an alternative way to finance with risk-free securities instead of high interest debt plans with volatile cost of equity.…”

Section: Increasing Green Bond Performancesupporting

confidence: 86%

Green bond as a new determinant of sustainable green financing, energy efficiency investment, and economic growth: a global perspective

Ning¹,

Cherian

Sial

et al. 2022

Environ Sci Pollut Res

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The purpose of the study is to test the role of green bond financing on energy efficiency investment and economic growth. To achieve the study objective, fuzzy decision-making modeling technique is applied. The results revealed that bank loans are now the main source of financing for energy efficiency projects. Project-based financing might be replaced with Energy Performance Contracts (EPC) warranting energy efficiency investment. Moreover, green banks invest both public and private funds in energy efficiency promoting economic growth. The usage of green bonds for financing environmentally beneficial projects or companies is limitless. Providing for screening energy efficiency investment proposals with small payback hurdle rates might have large opportunity costs. Green bonds can be used to remove the financing barriers for green finance and sustainability tool. On this, study provides policy implications to key stakeholders; if suggested policy suggestions implemented successfully, these would help to enhance scope of green bond financing to uplift energy efficiency financing and green growth successfully.

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Section: Increasing Green Bond Performancesupporting

confidence: 86%

Green bond as a new determinant of sustainable green financing, energy efficiency investment, and economic growth: a global perspective

Ning¹,

Cherian

Sial

et al. 2022

Environ Sci Pollut Res

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show abstract

“…The development of the green finance market is facilitated by the country's specific regulatory system to effectively safeguard green bond issuance, related carbon trading activities, quality information disclosures and investor protection [32,45,50]. These complementary measures for public-private collaboration would support a healthy and orderly market environment to manage financial risks while promoting market-based financing innovation and scalability of renewable energy projects [29,38]. In particular, it is critical to ensure that green bonds will have a profound impact on green and sustainable development, while avoiding any "greenwashing" or false green projects.…”

Section: Discussionmentioning

confidence: 99%

“…A recent study further suggests the growing relevance of green bond for climate finance among the emerging economies [16]. China as an emerging economy has reckoned the significance of developing green finance into the national-level strategy under a centralized economic planning system while complemented by a market-based innovative financing mechanism [29]. As China's economic development progresses into a new era, the development of domestic green financial market is expected to keep in line with international standards to achieve China's sustainable development strategy in the context of globalization [27,30].…”

Section: Green Financing Policy Under a Political Economymentioning

confidence: 99%

Scaling up Renewable Energy Assets: Issuing Green Bond via Structured Public-Private Collaboration for Managing Risk in an Emerging Economy

2021

Energies

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Green bonds have increasingly been utilized around the world as a source of financing for renewable energy development, designed with compliance requirements and measurable economic returns to investors, while mitigating climate change. However, the efficacy of green bond arranged in the emerging economies for financing renewable energy assets and how the underlying risks are managed have remained to be explored. The paper aims to examine the evolving green financial system sponsored by both public and private institutions in managing such risks within China’s emerging economy. A case study of green financing for a bundle of wind power assets led by a state-owned enterprise (SOE) reveals an alternative approach by structuring public–private collaboration while stipulating market-based financial incentives to institutional stakeholders under a political economy. This institutional consortium is composed of a state development bank, a commercial bank, credit rating agencies, institutional and private investors, regional power purchasers, and carbon trading entities. Financial stakeholders’ risk in such emerging sustainable investment is moderated by these participating institutions and structured “upsides” from carbon trading aligned with the framework of green finance and standards for green bond development. The results reveal the potentials of scaling up the development of renewable energy by adequately managing and sharing key risks, while allocating substantial funding into renewable energy projects under such a green financial system that is to be complementary with a scalable post COVID-19 economic recovery.

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“…The choice of partnering with the World Bank, instead of other actors in the international green bond regime, is shaped by the long-standing influence of the World Bank in Malaysia since its independence in 1958 4 . As one of the earliest green bond issuers, the World Bank has played a significant role in devising the GBP (Monk and Perkins, 2020) and is an attractive resource of green finance knowledge and experience for Malaysian regulators. This points to the significance of ‘stickiness’ to particular practices (GBP) and relationships (the World Bank in Malaysia) in analysing the development of a new financial instrument like green sukuk (Lai, 2016).…”

Section: Developing Green Sukuk To Advance An Islamic Finance Frontiermentioning

confidence: 99%

Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia

Liu

Lai

2021

Environ Plan A

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In this paper, we analyse the recent development of green sukuk (often referred to as an Islamic green bond) since its issuance in Malaysia in 2017, and critically evaluate whether it addresses some of the existing contradictions of green finance. Using a financial ecologies approach, we examine Malaysia's configuration of green sukuk as drawing from the existing international green bond regime, partnership with the World Bank, and Malaysia's own experience and expertise in Islamic finance, with the objective of building Kuala Lumpur's competitiveness as a global Islamic financial centre. Through documents analysis and interviews with key market actors in Kuala Lumpur and other financial centres, our findings point to the emergent international adoption of green sukuk. While this achieves Malaysia's state-building objectives, specifically through expanding Malaysia's sukuk market and advancing its status as a frontier of Islamic financial innovations, the potential for improving the current green bond regime has been more doubtful. A key limitation is the incorporation of existing Green Bond Principles, which enables not only green sukuk's international acceptance but also renders it susceptible to greenwashing. By examining the intersection of different ecologies of green and Islamic finance, we reveal the contradictions and limitations of green sukuk in contributing to Malaysian state-building and climate action.

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What explains the emergence and diffusion of green bonds?

Cited by 41 publications

References 99 publications

Green bond as a new determinant of sustainable green financing, energy efficiency investment, and economic growth: a global perspective

Green bond as a new determinant of sustainable green financing, energy efficiency investment, and economic growth: a global perspective

Scaling up Renewable Energy Assets: Issuing Green Bond via Structured Public-Private Collaboration for Managing Risk in an Emerging Economy

Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia

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