Policy Support in Promoting Green Bonds in Asia

Dina Azhgaliyeva and Zhanna Kapsalyamova
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Dina Azhgaliyeva: Asian Development Bank Institute

No 1275, ADBI Working Papers from Asian Development Bank Institute

Abstract: Private green finance is imperative for climate change mitigation and adaptation, but the share of private green finance remains small, and the studies that have tackled the efficacy of policy instruments in promoting green finance are limited. Many economies, especially in Asia, have implemented different policies to incentivize the private sector to issue green bonds. However, there is a lack of empirical evidence on the effectiveness of such policies. We provide empirical evidence on the effectiveness of a broad range of green bond policies on the issuance of green bonds. Given the nascent nature of green bonds, we document the effects of several policy instruments supporting green bonds on the private sector’s issuance of green bonds in 58 green-bond-issuing economies, including 11 economies in Asia, over the period January 2010–June 2020. Using the difference-in-difference specification within the multilevel longitudinal model, we find that some green bond policies, such as green bond grants and tax incentives, as well as cooperation and policy signals, are effective in promoting the issuance of green bonds in the private sector in Asia. Regional cooperation and standardization have incentivized private green bond issuance in the European Union but not in the Association of Southeast Asian Nations region. Global cooperation and international standardization have had a positive impact on the issuance of private green bonds.

Keywords: green bonds; green finance; policy support; Asia (search for similar items in EconPapers)
JEL-codes: G23 Q28 Q42 Q48 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2021-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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