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Growth of the green bond market and green house gas emissions

Author

Listed:
  • Jakub Demski
  • Yingwei Dong
  • Patrick McGuire
  • Benoit Mojon

Abstract

This article examines whether stricter public policies to curb greenhouse gas emissions have spurred the development of green bond markets and whether the issuance of green bonds has been associated with a subsequent reduction in emissions. The findings indicate that green bond markets have grown the most in countries with stricter emissions targets. Green bond issuance increased especially in sectors with heavy emissions that have been subject to sectoral mitigation policies. Moreover, even though green bonds lack binding constraints on emissions reduction, green bond issuance in those sectors has been followed by a significant reduction in emissions.

Suggested Citation

  • Jakub Demski & Yingwei Dong & Patrick McGuire & Benoit Mojon, 2025. "Growth of the green bond market and green house gas emissions," BIS Quarterly Review, Bank for International Settlements, March.
  • Handle: RePEc:bis:bisqtr:2503d
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    References listed on IDEAS

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    1. Guesmi, Khaled & Makrychoriti, Panagiota & Pyrgiotakis, Emmanouil G., 2025. "Climate change exposure and green bonds issuance," Journal of International Money and Finance, Elsevier, vol. 152(C).
    2. Ingo Fender & Mike McMorrow & Vahe Sahakyan & Omar Zulaica, 2019. "Green bonds: the reserve management perspective," BIS Quarterly Review, Bank for International Settlements, September.
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    Citations

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    Cited by:

    1. Cortina Lorente, Juan Jose & Raddatz, Claudio & Schmukler, Sergio & Williams, Tomas, 2025. "Green versus Conventional Corporate Debt: From Issuances to Emissions," Policy Research Working Paper Series 11226, The World Bank.
    2. McGee, Paraic & Sheenan, Lisa & Egan, Tom & O'Donohoe, Sheila, 2025. "Risk factor disclosure in green bond prospectuses and investor compensation," International Review of Financial Analysis, Elsevier, vol. 105(C).
    3. Ahmad, Wasim & Xiaoqin, Wang & Hao, Lu, 2026. "Turning Social Media Green Usage into Real-World Impact: How Green Psychology Fuels Green Purchase Behaviour," International Review of Management and Marketing, International Review of Management and Marketing, vol. 16(5), pages 180-194, July.
    4. Rehman, Mobeen Ur & Nautiyal, Neeraj & Zeitun, Rami & Vo, Xuan Vinh & Saleh Al-Faryan, Mamdouh Abdulaziz, 2025. "Can we put green bonds in a single basket?," The North American Journal of Economics and Finance, Elsevier, vol. 80(C).
    5. Liang, Hao & Ng, Lilian & Yoon, Aaron, 2025. "Editorial: What have we learned about green and climate finance?," The British Accounting Review, Elsevier, vol. 57(5).
    6. Brehmer, Sarah & Cézanne, Thibault & Kirschenmann, Karolin & Zilke, Philip, 2025. "Catalysts for change: Can green bonds accelerate Europe's transition to a green economy?," ZEW policy briefs 11/2025, ZEW - Leibniz Centre for European Economic Research.
    7. Di Tommaso, Caterina & Perdichizzi, Salvatore & Vigne, Samuel & Zaghini, Andrea, 2025. "Is the Government always greener?," Energy Economics, Elsevier, vol. 152(C).
    8. Daud, Ataullah & Jadoon, Atif Khan & Ali, Amjad & Audi, Marc, 2026. "Green Finance Regulations and Disclosure Effectiveness: The Role of Governance and Enforcement Capacity," MPRA Paper 129351, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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