Partridge, Candace C.;
(2019)
Green Municipal Bonds and the Financing of Green Infrastructure in the United States.
Doctoral thesis (Eng.D), UCL (University College London).
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Abstract
Green municipal bonds are a novel way to help unlock finance for investment in sustainable and urban infrastructure in the US. However, issuance lags in the US market due to negative perceptions such as high cost, low returns, and greater risk. In this study we aim to demonstrate that US green municipal bond performance is consistent with the returns of general municipal bonds, which can improve investor confidence and increase demand. The performance of this bond sector is assessed through two different means: through the creation of a green municipal bond index and benchmarking its performance against an overall municipal bond index; and by looking for a price difference between green municipal bonds and their conven- tional counterparts through yield curve assessment. Increased investment in this sector could be triggered by showing that the green municipal bond sector performs similarly to, or better than, conventional municipal bonds. We found that an in- dex comprised of green muni bonds outperforms the closest equivalent S&P index from 2014-2017, and there is a statistically significant green premium (“greenium”) present in the secondary muni bond market of at least 3 basis points in 2017. There was no conclusive evidence for the presence of greenium at issue in the primary market, however there are some signs that this could change, and furthermore we do not observe that green muni bonds come to market at a discount. These results are key to encouraging growth in the green municipal bond market, which can help American cities to target ESG and SRI investors and unlock more capital for green and climate-aligned infrastructure projects.
| Type: | Thesis (Doctoral) |
|---|---|
| Qualification: | Eng.D |
| Title: | Green Municipal Bonds and the Financing of Green Infrastructure in the United States |
| Event: | UCL (University College London) |
| Open access status: | An open access version is available from UCL Discovery |
| Language: | English |
| Additional information: | Copyright © The Author 2019. Original content in this thesis is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) Licence (https://creativecommons.org/licenses/by-nc/4.0/). Any third-party copyright material present remains the property of its respective owner(s) and is licensed under its existing terms. Access may initially be restricted at the author’s request. |
| Keywords: | finance, climate, infrastructure, bonds, greenbonds, green, municipal, urban |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10071463 |
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