Green bonds

Paraskevi Boufounou

Chapter 70 in Elgar Encyclopedia of Energy Economics, 2025, pp 268-271 from Edward Elgar Publishing

Abstract: Green bonds are an innovative financial development instrument that is being used to raise funds dedicated to climate mitigation, adaptation, and other environment-friendly projects. Green bonds can be issued by states, state entities, municipalities, international organizations, banks, and companies. Their additional transaction costs are offset by their benefits (providing an additional source of green finance, enabling longer-term green financing, enhancing an issuer's reputation, and creating new green financial products available to responsible and long-term investors) and the “greenium” (difference in yield with conventional bonds) they often offer. The progressive effort at the international and European level to cope effectively with green bonds’ main limitations – i.e., “greenwashing” and the lack of a unified framework for defining green projects and measuring their impact – would further enhance their use, transforming them into a vital instrument for sustainable development.

Keywords: Green Bonds; Innovative Financial Development Instrument; Greenium; Green-Washing; Impact Measurement; Issuers (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035310364
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