Event Details

Internal seminar with Dakshina Da Silva

Abstract: Financing climate change mitigation projects is costly. Many countries use bonds to finance them. Since 2018, Chinese local governments have identified 'local green projects' and raised funds using local bonds. Using data from the newly created local bond market, we find revenues from six green bond types that reveal that primary dealers win with different rates. As the Central Government backs these bonds, revenue rankings could be interpreted as a direct indicator of willingness to pay for green goods. We also show that local environmental outcomes have improved, and purchasing green bonds helps dealers continue in the market. Our analysis is based on more than ¥10.45 trillion in local bonds.