Professor & Pictet Chair @GVAGrad, VP @cepr_org & Director ICMB. Before @UNCTAD @the_IDB @AUB_Lebanon @unito 2 daughters. FVCG โท๐ Twitter handle @upanizza
www.upanizza.com
Ugo Panizza is an Italian and Swiss economist. He is a professor of International Economics, department head, and Pictet Chair in Finance and Development at the Graduate Institute of International and Development Studies in Geneva. He is a vice-president of the Centre for Economic Policy Research (CEPR), the director of the International Center for Monetary and Banking Studies, the editor in chief of Oxford Open Economics and International Development Policy, and the deputy director of the Centre for Finance and Development. He is a members of the Scientific Committees of the Fondazione Luigi Einaudi (Torino) and Long-term Investors@UniTo. .. more
Reposted by Ugo Panizza
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๐งฉ In sum:
Sovereign green bonds = big promise, small payoff.
The sovereign greenium exists โ but remains a tiny price effect attached to a big idea.
ideas.repec.org/p/gii/giihei...
#GreenFinance #SustainableFinance #SovereignDebt #ClimatePolicy #EconTwitter
Thereโs also a credibility problem:
๐ None of the >300 sovereign green bond prospectuses we reviewed make environmental promises legally binding.
No clauses, no enforcement, no default events if targets are missed.
So what drives the (tiny) greenium?
We find it increases when:
๐ก๏ธ climate transition risks are salient
๐ countries are more vulnerable to climate change
The median discount on Germanyโs green bonds saves about $16 million per year โ out of an $80 billion portfolio.
Even converting the entire German debt stock to โgreenโ would cut interest costs by <2%.
๐ก Result: The greenium exists, but it is small.
โก๏ธ ~2 basis points in advanced economies
โก๏ธ ~13 basis points in emerging markets
Statistically significant, but economically tiny.
In a new paper, we study 332 matched pairs of green and conventional sovereign and quasi sovereign bonds issued between 2014โ2023.
We quantify the greenium: the yield discount investors accept for going green.
The paper is here: ideas.repec.org/p/gii/giihei...
Over the past decade, sovereign green bonds have gone from curiosity to commonplace. ๐๐ถ
Since Polandโs 2016 debut, >30 governments have issued debt labelled as โgreen.โ But do these bonds actually lower borrowing costs?
@gvagrad.bsky.social @gvagrad-hcgs.bsky.social
Reposted by Ugo Panizza, John Hogan
introducing the African Debt Database - a new, comprehensive dataset that traces both domestic and external debt instruments at a granular level.
๐ cepr.org/publications...
Reposted by Ugo Panizza