How Large is the Sovereign Greenium?

Sakai Ando, Chenxu Fu, Francisco Roch and Ursula Wiriadinata

No 2023/080, IMF Working Papers from International Monetary Fund

Abstract: This paper assembles a comprehensive sovereign green bond database and estimates the sovereign greenium. The development of green bond markets has been one of the most important financial breakthroughs in the domain of sustainable finance during the last 15 years. A central benefit associated with green bonds has been that they exhibit a positive green premium (greenium), i.e., a lower yield relative to a similar conventional bond. Yet, issuances at the sovereign level have been relatively recent and not well documented in the literature. We find that green bonds are issued at a relatively small premium (4 basis points on average) in Advanced Economies. Yet, importantly, the greenium is growing over time and is considerably larger (11 basis points on average) for Emerging Market Economies.

Keywords: Green Bonds; Sustainable Finance; Financial Innovation; Sovereign Debt; Greenium; Climate Change.; bond database; green bond; Green bond data; green premium; Climate finance; Bonds; Sovereign bonds (search for similar items in EconPapers)
Pages: 15
Date: 2023-04-07
New Economics Papers: this item is included in nep-ene and nep-env
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Related works:
Journal Article: How Large is the Sovereign Greenium? (2024)
Working Paper: How Large is the Sovereign Greenium? (2023)
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