How Large is the Sovereign Greenium?

12 Pages Posted: 24 Apr 2023

See all articles by Francisco Roch

Francisco Roch

International Monetary Fund (IMF)

Sakai Ando

International Monetary Fund (IMF)

Chenxu Fu

Independent

Ursula Wiriadinata

affiliation not provided to SSRN

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Abstract

The development of green bond markets has been one of the most important financial breakthroughs in the domain of sustainable finance during the last 15 years. A central benefit associated with green bonds has been the green premium (greenium). Yet the issuances at the sovereign level have been relatively recent and not well documented in the literature. This paper assembles a comprehensive sovereign green bond database and estimates the sovereign greenium. We find that green bonds are issued at a relatively small premium (4 basis points on average) in Advanced Economies. Yet, importantly, greenium is growing over time and considerably larger (11 basis points on average) for Emerging Market Economies.

Keywords: Green bonds, sustainable finance, financial innovation, Sovereign debt, Greenium, Climate change

Suggested Citation

Roch, Francisco and Ando, Sakai and Fu, Chenxu and Wiriadinata, Ursula, How Large is the Sovereign Greenium?. Available at SSRN: https://ssrn.com/abstract=4427184 or http://dx.doi.org/10.2139/ssrn.4427184

Francisco Roch (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Sakai Ando

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Chenxu Fu

Independent ( email )

United States

Ursula Wiriadinata

affiliation not provided to SSRN ( email )

No Address Available

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