Growth of the green bond market and green house gas emissions

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.