Drivers of green bond market growth: The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability

Clarence Tolliver, Alexander Ryota Keeley, Shunsuke Managi

研究成果: ジャーナルへの寄稿記事

抄録

Green bonds are increasingly being applied to finance emissions reductions, sustainable development, and other cleaner production investments conducive to reaching the 2 °C temperature target of the Paris Agreement. As their markets are relatively nascent, there is a gap in the empirical literature on the drivers of green bond market growth. To assess the impact that capital market growth drivers and Nationally Determined Contributions to the Paris Agreement have on green bond issuance volumes as indicators of market growth, this study employed a structural equation model using a panel dataset of over $300 billion in green bonds issued in 49 countries between 2007 and 2017. This is the first econometric study to demonstrate unique drivers of green bond market growth in addition to factors that similarly affect conventional bond market growth. This is also the first study to construct a normalized index of Nationally Determined Contributions robustness scores to measure their impacts on green bond market growth. Macroeconomic latent factors exerted three times the total influence exerted by institutional latent factors. Institutional effects are positive and indirect, while OECD membership impacts were small and statistically insignificant. Nationally Determined Contributions scores exerted the largest positive and statistically significant impacts among observed variables. These results suggest that Nationally Determined Contributions and other macroeconomic and institutional factors are driving growing green bond issuances that will finance climate and sustainability investments through the future. They also highlight the need for broader examinations of the determinants of green bond issuances as investment vehicles for sustainable outcomes.

元の言語英語
記事番号118643
ジャーナルJournal of Cleaner Production
244
DOI
出版物ステータス出版済み - 1 20 2020

Fingerprint

Sustainable development
sustainability
market
Finance
macroeconomics
finance
cleaner production
capital market
OECD
econometrics
Financial markets
Bond market
Sustainability
sustainable development
climate
temperature
Temperature
Latent factors

All Science Journal Classification (ASJC) codes

  • Renewable Energy, Sustainability and the Environment
  • Environmental Science(all)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

これを引用

Drivers of green bond market growth : The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability. / Tolliver, Clarence; Keeley, Alexander Ryota; Managi, Shunsuke.

:: Journal of Cleaner Production, 巻 244, 118643, 20.01.2020.

研究成果: ジャーナルへの寄稿記事

@article{6cc5d51f7b0c440abff5b56879d91f12,
title = "Drivers of green bond market growth: The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability",
abstract = "Green bonds are increasingly being applied to finance emissions reductions, sustainable development, and other cleaner production investments conducive to reaching the 2 °C temperature target of the Paris Agreement. As their markets are relatively nascent, there is a gap in the empirical literature on the drivers of green bond market growth. To assess the impact that capital market growth drivers and Nationally Determined Contributions to the Paris Agreement have on green bond issuance volumes as indicators of market growth, this study employed a structural equation model using a panel dataset of over $300 billion in green bonds issued in 49 countries between 2007 and 2017. This is the first econometric study to demonstrate unique drivers of green bond market growth in addition to factors that similarly affect conventional bond market growth. This is also the first study to construct a normalized index of Nationally Determined Contributions robustness scores to measure their impacts on green bond market growth. Macroeconomic latent factors exerted three times the total influence exerted by institutional latent factors. Institutional effects are positive and indirect, while OECD membership impacts were small and statistically insignificant. Nationally Determined Contributions scores exerted the largest positive and statistically significant impacts among observed variables. These results suggest that Nationally Determined Contributions and other macroeconomic and institutional factors are driving growing green bond issuances that will finance climate and sustainability investments through the future. They also highlight the need for broader examinations of the determinants of green bond issuances as investment vehicles for sustainable outcomes.",
author = "Clarence Tolliver and Keeley, {Alexander Ryota} and Shunsuke Managi",
year = "2020",
month = "1",
day = "20",
doi = "10.1016/j.jclepro.2019.118643",
language = "English",
volume = "244",
journal = "Journal of Cleaner Production",
issn = "0959-6526",
publisher = "Elsevier Limited",

}

TY - JOUR

T1 - Drivers of green bond market growth

T2 - The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability

AU - Tolliver, Clarence

AU - Keeley, Alexander Ryota

AU - Managi, Shunsuke

PY - 2020/1/20

Y1 - 2020/1/20

N2 - Green bonds are increasingly being applied to finance emissions reductions, sustainable development, and other cleaner production investments conducive to reaching the 2 °C temperature target of the Paris Agreement. As their markets are relatively nascent, there is a gap in the empirical literature on the drivers of green bond market growth. To assess the impact that capital market growth drivers and Nationally Determined Contributions to the Paris Agreement have on green bond issuance volumes as indicators of market growth, this study employed a structural equation model using a panel dataset of over $300 billion in green bonds issued in 49 countries between 2007 and 2017. This is the first econometric study to demonstrate unique drivers of green bond market growth in addition to factors that similarly affect conventional bond market growth. This is also the first study to construct a normalized index of Nationally Determined Contributions robustness scores to measure their impacts on green bond market growth. Macroeconomic latent factors exerted three times the total influence exerted by institutional latent factors. Institutional effects are positive and indirect, while OECD membership impacts were small and statistically insignificant. Nationally Determined Contributions scores exerted the largest positive and statistically significant impacts among observed variables. These results suggest that Nationally Determined Contributions and other macroeconomic and institutional factors are driving growing green bond issuances that will finance climate and sustainability investments through the future. They also highlight the need for broader examinations of the determinants of green bond issuances as investment vehicles for sustainable outcomes.

AB - Green bonds are increasingly being applied to finance emissions reductions, sustainable development, and other cleaner production investments conducive to reaching the 2 °C temperature target of the Paris Agreement. As their markets are relatively nascent, there is a gap in the empirical literature on the drivers of green bond market growth. To assess the impact that capital market growth drivers and Nationally Determined Contributions to the Paris Agreement have on green bond issuance volumes as indicators of market growth, this study employed a structural equation model using a panel dataset of over $300 billion in green bonds issued in 49 countries between 2007 and 2017. This is the first econometric study to demonstrate unique drivers of green bond market growth in addition to factors that similarly affect conventional bond market growth. This is also the first study to construct a normalized index of Nationally Determined Contributions robustness scores to measure their impacts on green bond market growth. Macroeconomic latent factors exerted three times the total influence exerted by institutional latent factors. Institutional effects are positive and indirect, while OECD membership impacts were small and statistically insignificant. Nationally Determined Contributions scores exerted the largest positive and statistically significant impacts among observed variables. These results suggest that Nationally Determined Contributions and other macroeconomic and institutional factors are driving growing green bond issuances that will finance climate and sustainability investments through the future. They also highlight the need for broader examinations of the determinants of green bond issuances as investment vehicles for sustainable outcomes.

UR - http://www.scopus.com/inward/record.url?scp=85073751442&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85073751442&partnerID=8YFLogxK

U2 - 10.1016/j.jclepro.2019.118643

DO - 10.1016/j.jclepro.2019.118643

M3 - Article

AN - SCOPUS:85073751442

VL - 244

JO - Journal of Cleaner Production

JF - Journal of Cleaner Production

SN - 0959-6526

M1 - 118643

ER -