Green bonds markets and renewable energy development: Policy integration for achieving carbon neutrality

Abstract

Considering the importance of developing renewable energy consumption to reduce the threat of climate change, this study attempts to evaluate the impacts of green bonds and the development of wind, hydro, and solar energy in a sample of 15 member economies of the Organisation for Economic Co-operation and Development (OECD). It employs the fully modified OLS (FMOLS) technique based on data from 2010 to 2020. The estimations show that issued green bonds increase wind and hydro-energy consumption in OECD countries. At the same time, green bonds do not significantly impact solar energy deployment in these economies. The central practical integrated policies recommended by this study include developing a digital green bond market, establishing a green bond issuance network (GBIN), implementing an international carbon tax policy, and planning to achieve green economic recovery through the green bond market development.