IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v234y2024ics0960148124013284.html
   My bibliography  Save this article

Can issuing carbon neutral bonds promote low-carbon investment in renewable energy industry？

Author

Listed:
  • Jia, Zhen
  • Li, He
  • Lu, Juan
  • Zhang, Yalong

Abstract

Guiding by the goal of carbon neutrality and carbon peaking, the importance of low-carbon finance in renewable energy industry is becoming increasingly prominent, and carbon neutral bond (CANB) is showing a strong development trend. This study explores the impact of CANB on low carbon investment (LOCI) in renewable energy industry based on the OLS method combined with the quarterly samples, and the following results are obtained. First, issuing CANB can lead to a 4.7 % increase in LOCI. Second, the higher the scale, duration, and rating of CANB, the more they can promote LOCI. Third, CANB may promote LOCI by strengthening corporate environmental responsibility and alleviating financing constraints, while CANB may reduce LOCI by increasing operational pressure. Fourth, CANB has a stronger promoting effect on the LOCI of large-scale firms, central state-owned firms, and eastern firms. Fifth, under the pressure of carbon peaking and public low-carbon attention, CANB has a higher promoting effect on LOCI. This study aims to provide policy implications for promoting low-carbon development of renewable energy firms.

Suggested Citation

  • Jia, Zhen & Li, He & Lu, Juan & Zhang, Yalong, 2024. "Can issuing carbon neutral bonds promote low-carbon investment in renewable energy industry？," Renewable Energy, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:renene:v:234:y:2024:i:c:s0960148124013284
    DOI: 10.1016/j.renene.2024.121260
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148124013284
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2024.121260?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yan, Lei & Mirza, Nawazish & Umar, Muhammad, 2022. "The cryptocurrency uncertainties and investment transitions: Evidence from high and low carbon energy funds in China," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    2. Lin, Boqiang & Li, Minyang, 2022. "Understanding the investment of renewable energy firms in the face of economic policy uncertainty – Micro-evidence from listed companies in China," China Economic Review, Elsevier, vol. 75(C).
    3. Shi, Xianwang & Ma, Jianteng & Jiang, Anxuan & Wei, Shuang & Yue, Leilei, 2023. "Green bonds: Green investments or greenwashing?," International Review of Financial Analysis, Elsevier, vol. 90(C).
    4. Xu, Guoquan & Lu, Nuotian & Tong, Yan, 2022. "Greenwashing and credit spread: Evidence from the Chinese green bond market," Finance Research Letters, Elsevier, vol. 48(C).
    5. Reboredo, Juan C., 2018. "Green bond and financial markets: Co-movement, diversification and price spillover effects," Energy Economics, Elsevier, vol. 74(C), pages 38-50.
    6. Wang, Qunwei & Fan, Zining, 2023. "Green finance and investment behavior of renewable energy enterprises: A case study of China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    7. Wang, Chih-Wei & Wu, Yu-Ching & Hsieh, Hsin-Yi & Huang, Po-Hsiang & Lin, Meng-Chieh, 2022. "Does green bond issuance have an impact on climate risk concerns?," Energy Economics, Elsevier, vol. 111(C).
    8. Wang, Yang & Taghizadeh-Hesary, Farhad, 2023. "Green bonds markets and renewable energy development: Policy integration for achieving carbon neutrality," Energy Economics, Elsevier, vol. 123(C).
    9. Lu, Juan & Li, He, 2024. "The impact of ESG ratings on low carbon investment: Evidence from renewable energy companies," Renewable Energy, Elsevier, vol. 223(C).
    10. Gu, Yan & Ho, Kung-Cheng & Yan, Cheng & Gozgor, Giray, 2021. "Public environmental concern, CEO turnover, and green investment: Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 100(C).
    11. Chang, Ning, 2013. "Sharing responsibility for carbon dioxide emissions: A perspective on border tax adjustments," Energy Policy, Elsevier, vol. 59(C), pages 850-856.
    12. Tang, Ying & Wang, Biliang & Pan, Ningning & Li, Zhiyong, 2023. "The impact of environmental information disclosure on the cost of green bond: Evidence from China," Energy Economics, Elsevier, vol. 126(C).
    13. Zhang, Dongyang & Kong, Qunxi, 2022. "Renewable energy policy, green investment, and sustainability of energy firms," Renewable Energy, Elsevier, vol. 192(C), pages 118-133.
    14. Lu, Juan & Li, He & Yang, Ran, 2024. "Low carbon finance drives corporate carbon emissions reduction: A perspective from issuing carbon neutral bonds," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    15. Wu, Tao & Zhang, Li-Guo & Ge, Teng, 2019. "Managing financing risk in capacity investment under green supply chain competition," Technological Forecasting and Social Change, Elsevier, vol. 143(C), pages 37-44.
    16. Liu, Yang & Zhao, Xiaomeng & Dong, Kangyin & Jiang, Qingzhe, 2023. "Assessing the role of green finance in sustainable energy investments by power utilities: Evidence from China," Utilities Policy, Elsevier, vol. 84(C).
    17. Wang, Jiazhen & Chen, Xin & Li, Xiaoxia & Yu, Jing & Zhong, Rui, 2020. "The market reaction to green bond issuance: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    18. Liu, Fengyun & Yu, Jiaru & Shen, Yifan & He, Lingyun, 2022. "Does the resource-dependent motivation to disclose environmental information impact company financing? Evidence from renewable energy companies of China," Renewable Energy, Elsevier, vol. 181(C), pages 156-166.
    19. Lin, Boqiang & Xie, Yongjing, 2023. "The impact of government subsidies on capacity utilization in the Chinese renewable energy industry: Does technological innovation matter?," Applied Energy, Elsevier, vol. 352(C).
    20. Sohag, Kazi & Hassan, M. Kabir & Bakhteyev, Stepan & Mariev, Oleg, 2023. "Do green and dirty investments hedge each other?," Energy Economics, Elsevier, vol. 120(C).
    21. Li, He & Lu, Juan, 2023. "Can low-carbon mergers and acquisitions reduce carbon emissions? Evidence from China's energy companies," Energy, Elsevier, vol. 283(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lu, Juan & Li, He & Yang, Ran, 2024. "Low carbon finance drives corporate carbon emissions reduction: A perspective from issuing carbon neutral bonds," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    2. Tan, Xiujie & Dong, Hanmin & Liu, Yishuang & Su, Xin & Li, Zixian, 2022. "Green bonds and corporate performance: A potential way to achieve green recovery," Renewable Energy, Elsevier, vol. 200(C), pages 59-68.
    3. Wang, Kai-Hua & Wen, Cui-Ping & Liu, Hong-Wen & Liu, Lu, 2023. "Promotion or hindrance? Exploring the bidirectional causality between geopolitical risk and green bonds from an energy perspective," Resources Policy, Elsevier, vol. 85(PB).
    4. Li, Yanxi & Yu, Conghui & Shi, Jinyan & Liu, Yuanyuan, 2023. "How does green bond issuance affect total factor productivity? Evidence from Chinese listed enterprises," Energy Economics, Elsevier, vol. 123(C).
    5. Wang, Congcong & Wang, Chong & Long, Huaigang & Zaremba, Adam & Zhou, Wenyu, 2024. "Green bond credit spreads and bank loans in China," International Review of Financial Analysis, Elsevier, vol. 94(C).
    6. Tang, Ying & Wang, Biliang & Pan, Ningning & Li, Zhiyong, 2023. "The impact of environmental information disclosure on the cost of green bond: Evidence from China," Energy Economics, Elsevier, vol. 126(C).
    7. Qi, Xiaohong & Zhang, Guofu, 2022. "Dynamic connectedness of China’s green bonds and asset classes," The North American Journal of Economics and Finance, Elsevier, vol. 63(C).
    8. Hu, Xin & Zhu, Bo & Lin, Renda & Li, Xiru & Zeng, Lidan & Zhou, Sitong, 2024. "How does greenness translate into greenium? Evidence from China's green bonds," Energy Economics, Elsevier, vol. 133(C).
    9. Shi, Ning & Wang, Ying & Chen, Wenzhe, 2022. "Many hands make light work: Evidence from China’s anti-epidemic bonds," Economics Letters, Elsevier, vol. 214(C).
    10. Lin, Boqiang & Wang, Siquan, 2023. "The performance of specialized and oriented diversified firms: A comparative analysis from the targeted expansion of renewable energy business of listed companies," International Review of Financial Analysis, Elsevier, vol. 89(C).
    11. Wei, Yu & Shi, Chunpei & Zhou, Chunyan & Wang, Qian & Liu, Yuntong & Wang, Yizhi, 2024. "Market volatilities vs oil shocks: Which dominate the relative performance of green bonds?," Energy Economics, Elsevier, vol. 136(C).
    12. Li, Minyang & Lin, Boqiang, 2024. "Clean energy business expansion and financing availability: The role of government and market," Energy Policy, Elsevier, vol. 191(C).
    13. Xu, Pei & Ye, Penghao & Zhao, Fan & Jahanger, Atif, 2024. "Technology spillover and market competitiveness in green credit induced corporate green innovation: An evolutionary game theory and empirical study," Technological Forecasting and Social Change, Elsevier, vol. 207(C).
    14. Wang, Yuxi & Hu, Fangjia & Wang, Yunyun, 2024. "Analyst coverage and greenwashing: Evidence from Chinese A-Share listed corporations," International Review of Economics & Finance, Elsevier, vol. 94(C).
    15. Ana-Belén Alonso-Conde & Javier Rojo-Suárez, 2020. "On the Effect of Green Bonds on the Profitability and Credit Quality of Project Financing," Sustainability, MDPI, vol. 12(16), pages 1-19, August.
    16. Lin, Boqiang & Xie, Yongjing, 2024. "Driving renewable energy innovation investments: Is venture capital a novel strategic choice? Evidence from China," Renewable Energy, Elsevier, vol. 237(PC).
    17. Cai, Zheng & Qian, Long, 2023. "Scarcity of mineral resources and governance and development of renewable energy projects in China," Resources Policy, Elsevier, vol. 86(PB).
    18. Xu, Danyang & Hu, Yang & Corbet, Shaen & Lang, Chunlin, 2024. "Return connectedness of green bonds and financial investment channels in China: Implications for hedging and regulation," Research in International Business and Finance, Elsevier, vol. 70(PA).
    19. Naeem, Muhammad Abubakr & Farid, Saqib & Ferrer, Román & Shahzad, Syed Jawad Hussain, 2021. "Comparative efficiency of green and conventional bonds pre- and during COVID-19: An asymmetric multifractal detrended fluctuation analysis," Energy Policy, Elsevier, vol. 153(C).
    20. Jiasheng Yu & Maojun Zhang & Ruoyu Liu & Guodong Wang, 2023. "Dynamic Effects of Climate Policy Uncertainty on Green Bond Volatility: An Empirical Investigation Based on TVP-VAR Models," Sustainability, MDPI, vol. 15(2), pages 1-17, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:234:y:2024:i:c:s0960148124013284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.