A Multidisciplinary Literature Review of Academic Research on the Green Bond Market

Abstract

Climate finance is the mobilization of public and private capital toward climate mitigation and adaptation. Green bonds are one of a growing number of financial products used to facilitate climate finance investments. The green bond market has grown rapidly since the European Investment Bank’s inaugural issue in 2007. In November 2018, the total outstanding volume of green bond issues crossed the $500 billion threshold, with an additional $148 billion in green bonds issued since the beginning of 2019. As the bridge between scientists, policymakers, and the private sector, the field encompassing green bonds and other financial instruments could be critical to meeting the targets of the Paris Agreement under the United Nation’s Framework Convention on Climate Change (UNFCCC). And as that happens, it will become increasingly clear that this field will require a vast array of expertise and perspectives. This paper adopts an interdisciplinary approach to map the burgeoning field of literature on green bonds and climate finance more broadly. We situate the green bond market within the development of climate finance by outlining the role that scientific research plays in developing green bond guidelines and standards. We examine this trend from an anthropological and economic-history approach, before delving into the policy research that is emerging in the climate finance and green bond field. This provides the context for an analysis of the rapidly growing body of legal research on the green bond market, including a reflection on the legal ramifications of a pricing difference between vanilla and green bonds. Finally, we propose areas for further research in each of our respective disciplines of anthropology, policy, and law.

Keywords: green bonds, climate finance, law, policy, anthropology

JEL Classification: G3, O16, Q01, Q2, Q3, Q4, Q54, Q56