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Determinants and effects of green bond issuance: Environmental awareness, ecological budget, biodiversity, oil and lithium

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  • Horn, Matthias
  • Dabbous, Amal
  • Oehler, Andreas
  • Göbel, Florian

Abstract

This study explores the determinants of green bond issuance and its environmental impacts. The empirical analysis employs a panel dataset from 29 OECD countries for the period 2014–2020 and two main models. The first model identifies determinants of green bond issuance, revealing that higher environmental awareness, GDP per capita, oil prices, a higher degree of urbanization, and lower lithium prices are associated with a higher volume of issued green bonds. The second model employs several indicators of environmental performance as dependent variables. The main independent variables are the issued green bond volume, environmental awareness, GDP per capita, environmental policy stringency, renewable energy capacity, and the share of protected areas. The results show that green bond volume, stringent environmental policy, and higher environmental awareness are positively related to the ecological budget and biodiversity while reducing the ecological footprint. Channels for this impact are positive relationships between green bond funding and renewable energy capacity and the share of protected areas. Governments should therefore not only promote the issuance of green bonds, which are essential to raise the financial resources needed to finance environmentally friendly projects, but also offer tax and investment incentives, provide technical assistance, and simplify procedures for project implementation. In addition, resources should be devoted to raising environmental awareness among the population.

Suggested Citation

  • Horn, Matthias & Dabbous, Amal & Oehler, Andreas & Göbel, Florian, 2026. "Determinants and effects of green bond issuance: Environmental awareness, ecological budget, biodiversity, oil and lithium," Ecological Economics, Elsevier, vol. 239(C).
    • Handle: RePEc:eee:ecolec:v:239:y:2026:i:c:s0921800925002368
    DOI: 10.1016/j.ecolecon.2025.108753
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    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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