A European Climate Bond

Irene Monasterolo (), Antonia Pacelli (), Marco Pagano and Carmine Russo ()
Additional contact information
Irene Monasterolo: Utrecht University and SUERF.
Antonia Pacelli: Toulouse School of Economics and INRAE
Carmine Russo: University of Naples Federico II

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Europe faces a large climate investment gap. To fill it, we propose the joint issuance of climate bonds by the European Stability Mechanism. These bonds would be funded by selling greenhouse gas emission allowances via the Emissions Trading System, extended to cover all sectors. Access to the resulting funds would be conditional on countries’ performance on the implementation of climate projects. European climate bonds would meet the demand for a safe, liquid and green asset, while accelerating climate investment, and increasing its resilience to sovereign crises, as well as the greening of both investors’ portfolios and monetary policy.

Keywords: climate finance; green investments; safe asset; GHG emission allowances; ETS. (search for similar items in EconPapers)
JEL-codes: D62 E61 H23 H27 P18 Q51 Q52 Q53 Q54 Q58 (search for similar items in EconPapers)
Date: 2024-03-01, Revised 2024-03-27
New Economics Papers: this item is included in nep-eec, nep-ene, nep-env, nep-fmk and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: A European climate bond (2025)
Working Paper: A European Climate Bond (2025)
Working Paper: A European Climate Bond (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:702

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