The coevolution effect of central bank digital currency and green bonds on the net-zero economy

Baogui Xin, Kai Jiang and Ernesto D.R. Santibanez Gonzalez

Energy Economics, 2024, vol. 134, issue C

Abstract: Directed by the net-zero emission goal, the green bond has become an essential financial tool to promote the development of the green economy. However, the greenwashing risk makes it doubtful whether the green bond can play a positive role. Therefore, this study constructs a six-sector dynamic stochastic general equilibrium (DSGE) model to analyze whether the coevolution of central bank digital currency (CBDC) and green bonds can fully play a positive role in promoting the net-zero economy. The results indicate that: (i) Increased CBDC supply has a positive effect on the economy, and also promotes green bond financing and net-zero emissions. (ii) Compared with non-interest-bearing CBDC, the coevolution of interest-bearing CBDC and green bonds is more likely to promote the net-zero economy and enhance the effectiveness of monetary policy. (iii) When the economy is overheating or in recession, the central bank can regulate green bond financing by adjusting the CBDC interest rate to promote a net-zero economy. (iv) The coevolution of interest-bearing CBDC and green bonds will achieve a higher welfare level than non-interest-bearing CBDC. This study provides guidance for the coevolution of CBDC technology innovation and green bond financial innovation.

Keywords: Central bank digital currency (CBDC); Coevolution effect; Green bond; Net-zero economy (search for similar items in EconPapers)
JEL-codes: C11 C68 E12 E17 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988324002950
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:134:y:2024:i:c:s0140988324002950

DOI: 10.1016/j.eneco.2024.107587

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().