Abstract
Europe faces a large climate investment gap. To fill it, we propose the joint issuance of European climate bonds. These bonds would be funded by selling greenhouse gas emission allowances via the Emissions Trading System, extended to cover all sectors. Access to the resulting funds would be conditional on countries’ performance on the implementation of climate projects. European climate bonds would meet the demand for a safe, liquid and green asset, while accelerating climate investment, and increasing its resilience to sovereign crises, as well as the greening of both investors’ portfolios and monetary policy.
Reference
Irene Monasterolo, Antonia Pacelli, Marco Pagano, and Carmine Russo, “A European Climate Bond”, Economic Policy, n. eiae065, December 2024.
See also
Published in
Economic Policy, n. eiae065, December 2024