Innovation Case Study: Green bonds

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Innovation Case Study: Green bonds

Can green bonds deliver additional funds to strengthen environmental integrity without creating a negative bias against less financially attractive projects?

We propose the analysis of green bonds as a climate-related policy innovation, particularly focusing on the nexus between climate and energy.

Phase 1

Green bonds will be used as a case study for understanding the role of finance within the social metabolism. We shall investigate green bonds’ environmental additionality and intrinsic financial related bias. To capture the narratives behind green bonds and understand their justification, will shall start the assessment by carrying out qualitative analysis based on selected interviews with green bond participants acting both in the supply and demand side. Specific focus will be given to European government officials involved in the issuance of green bonds and participants in the High-Level Expert Group on Sustainable Finance. We shall build the analysis around the comparison of two country-level cases of green bond issuance. The choice will be made by the end of Phase 1, following the first interviews and the definition of key narratives to be assessed. The cases should be selected from a mix of a private and a public case within the same country, or two public issuances in different countries, to be defined depending on availability of data, accessibility and relevance to the selected narratives.

Partners: CA, UAB and UiB.

Phase 2

Based on the interviews, Phase 2 will build on the narratives to be assessed through a Quantitative Story Telling (QST) analysis, inquiring about the overall potential of green bonds as a policy option. We will look into the issues of additionality, credit-rating and sectoral biases by analysing at the countrylevel the issuance of green bonds. The deliverable should provide a clearer picture on the potential solutions and challenges linked to the development of green bonds, considering them as a policy innovation for the energy-climate nexus. More broadly, the case will posit ways in which financial and monetary flows might be included in the social metabolism analyses, aiming to advance the theory in the area.

Partners: CA, UAB and UiB.

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