Green Bonds as an Instrument to Finance Low Carbon Transition

35 Pages Posted: 25 Aug 2022

Date Written: March 1, 2019


The present paper examines the role that green bonds can play in financing the transition to low carbon economy. We first establish the need for central banks to respond to climate change challenges and we present the main ways in which they can get involved. We explain why green bonds should be used to instrument of choice for financing the low carbon transition, based, on the one hand, on the theoretical argument of intergenerational burden sharing and, on the other hand, on the practical need of large long-term infrastructure investments. After defining green bonds, we present their main characteristics. We then summarize the development of the green bond market in the last decade. We conclude by presenting ways in which to respond to existing challenges and barriers, so that the green bonds market develops further.

Keywords: Green bonds, climate change, low carbon transition

JEL Classification: Q54, G12, G28

Suggested Citation

Sartzetakis, Eftichios, Green Bonds as an Instrument to Finance Low Carbon Transition (March 1, 2019). Bank of Greece Working Paper No. 258, Available at SSRN: or

Eftichios Sartzetakis (Contact Author)

University of Macedonia ( email )

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics