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How Large is the Sovereign Greenium?
Author:
Mr. Sakai Ando
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https://orcid.org/0000-0003-2785-4375
,
Mr. Chenxu Fu
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Mr. Francisco Roch https://isni.org/isni/0000000404811396 International Monetary Fund

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Ursula Wiriadinata https://isni.org/isni/0000000404811396 International Monetary Fund

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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 080
Language:
English
Publication Date:
07 Apr 2023
DOI:
https://doi.org/10.5089/9798400235160.001
ISBN:
9798400235160
ISSN:
1018-5941
Pages:
15
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
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund