Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds

Malcolm Baker, Daniel Bergstresser, George Serafeim and Jeffrey Wurgler

No 25194, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes. After an overview of the U.S. corporate and municipal green bonds markets, we study pricing and ownership patterns using a simple framework that incorporates assets with nonpecuniary utility. As predicted, we find that green municipal bonds are issued at a premium to otherwise similar ordinary bonds. We also confirm that green bonds, particularly small or essentially riskless ones, are more closely held than ordinary bonds. These pricing and ownership effects are strongest for bonds that are externally certified as green.

JEL-codes: G12 Q52 Q53 Q54 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-ene and nep-env
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