Green bonds

1. Navigating the Complex Intersection of Green
Bonds, CO2 Emissions, and
Market Dynamics in Developing Nations

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CONTENT
01
05
03
07
02
06
04
08
INTRODUCTION & BACKGROUND
VARIABLES
MOTIVATION FOR RESEARCH
RECOMMENDATIONS
LITERATURE REVIEW
RESULTS & DISCUSSIONS
OBJECTIVE,HYPOTHESIS AND
MEHODOLOGY
REFERENCES

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INTRODUCTION AND BACKGROUND
In the context of the ongoing global efforts towards sustainable development and climate resilience, nations are
currently facing the critical imperative of adopting environmentally conscious practices.
Developing nations undergoing rapid industrialization are observing a notable increase in carbon emissions.
Addressing environmental degradation is not just a future obligation; it's a present-day necessity that influences both the
business world and overall human well-being. The push for a low-carbon, climate-resilient economy highlights the
importance of climate risk awareness and access to capital
Green Bonds offer a promising solution to finance sustainable projects and combat climate change
Green bonds are a type of fixed-income security where the proceeds are exclusively used to finance projects that have
positive environmental benefits.
CO2 emissions are the release of carbon dioxide into the atmosphere, a major greenhouse gas contributing to climate
change

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LITERATURE REVIEW

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MOTIVATION FOR RESEARCH
This study is driven by the urgent need to address climate change in developing economies
where the challenge lies in balancing economic growth with environmental responsibility
Aims to understand the intricate relationships between Green Bonds, CO2 emissions, and
local market dynamics
Study contributes valuable knowledge to the intersection of finance, sustainability, and
environmental impact

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To Understand the trend of Carbon Emissions and Green Bond Issuance.
To analyze the relationship between Green Bonds and CO2 Emissions in the Top
10 Developing Countries.
OBJECTIVES
To evaluate the Impact of Local Market Conditions on Green Bond Success.

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HYPOTHESIS
H0: There is no Relationship between Green Bonds and CO2 Emissions in the
Top 10 Developing Countries.
H1: There is Relationship between Green Bonds and CO2 Emissions in the Top 10
Developing Countries.

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Data Sample &
Methodology
DATA SAMPLE METHODOLOGY
Financial databases Bloomberg, World Bank &
IMF are used for data collection.
A Three-year dataset for the year 2020 to 2022
Correlation analysis

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9
VARIABLES
VARIABLES
Green Bond Issuance by
country (Billion USD)
Cumulative CO2
emissions (in tons)

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RESULTS & DISCUSSIONS
OBJECTIVE 1 - To Understand the trend of Carbon Emissions and Green Bond Issuance
Green bond issuance witnesses explosive growth from $4 billion in 2007 to an impressive $1 trillion in 2021, followed by
a concerning decline to $600 billion in 2022
Global emissions have steadily increased since the Industrial Revolution, plateauing briefly in the early 2010s and
resuming an upward trajectory since 2017.
Developed nations demonstrate stabilized emissions. Conversely, developing economies showcase rising emissions
driven by rapid industrialization, emphasizing the need for targeted green finance solutions
The energy sector grapples with the challenge of coal-dependent power generation, prompting the role of green bonds
in financing renewable energy projects and accelerating the transition to cleaner alternatives.
Continuous innovation in financial instruments, like green securitization and derivatives, is identified as a key driver to
unlock additional capital and expedite the transition to a low carbon economy.

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CORRELATION: Green bonds and CO2 Emissions of top 10 developing countries
OBJECTIVE 2 – Analyze the Relationship between Green Bonds and CO2 Emissions in the
Top 10 Developing Countries

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OBJECTIVE 3 – Evaluate the Impact of Local Market Conditions on Green Bond Success.

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Recommendations
INTRODUCE TAX INCENTIVES
ESTABLISH A GLOBAL GREEN BOND
CERTIFICATION BODY
ESTABLISH A GLOBAL GREEN
FINANCE OBSERVATORY

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REFERENCES
Agarwal, S., & Singh, T. (2017). Unlocking the Green Bond Potential in India. TERI. https://archive.nyu.edu/handle/2451/42243
Tang, D. Y., & Zhang, Y. (2018). Do Shareholders Benefit from Green Bonds?
https://www.sciencedirect.com/science/article/abs/pii/S0929119918301664
Maltais, A., & Nykvist, B. (2019). Understanding the Role of Green Bonds in Advancing Sustainability.
https://www.tandfonline.com/doi/full/10.1080/20430795.2020.1724864
Partridge, C., & Medda, F. (2019). The Evolution of Pricing Performance of Green Municipal Bonds.
https://discovery.ucl.ac.uk/id/eprint/10092042/
Xu, G., Lu, N., & Tong, Y. (2022). Greenwashing and Credit Spread: Evidence from the Chinese
Green Bond Market. https://ideas.repec.org/a/eee/finlet/v48y2022ics1544612322001830.html
Our World in Data. (n.d.). CO2 emissions. https://ourworldindata.org/co2-emissions
Climate Bonds Initiative. (n.d.). https://www.climatebonds.net/
International Monetary Fund. (n.d.). Climate Data. https://climatedata.imf.org/
International Monetary Fund. (n.d.). Home. Official Website. https://www.imf.org/
World Bank Group. (n.d.). World Bank Group. Official Website. https://www.worldbank.org/
Hammoudeh, S., Ajmi, A. N., & Mokni, K. (2020). Relationship between green bonds and financial and environmental variables: A novel
time-varying causality. Energy Economics, 92, 104941. https://www.sciencedirect.com/science/article/abs/pii/S0140988320302814
Marín-Rodríguez, N. J., González-Ruiz, J. D., & Botero, S. (2023). A wavelet analysis of the dynamic connectedness among oil prices, green
bonds, and co2 emissions. Risks, 11(1), 15. https://www.frontiersin.org/articles/10.3389/fenvs.2022.992726/full

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