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Evaluating Green Bonds
Evaluating Green Bonds

 

Tuesday, 1 August 2017
12:30 – 2:00pm

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Meeting number: 736 069 261

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Overview: Green Bonds are technically defined as thematic capital-rising instruments in which the proceeds will be exclusively applied (either by specifying Use of Proceeds, Direct Project Exposure, or Securitization) towards new and existing Green Projects – defined here as projects and activities with positive benefits for climate and environment. As market instruments of global finance, GBs aim to integrate environmental concerns in borrowers’ operations to give ethical as well as mainstream investors access to environment enhancing investment opportunities. Because they are subject to moral hazards from asymmetric information and contract incompleteness, GBs present special needs for ex ante evaluation, transparency and ex post monitoring. This study addresses some of the main questions raised by these needs, with regard to the credibility of the environmental claims of the issuers, the ethical nature of the product and their measurable impact on the economy and the environmental effects that they are aimed to achieve. To this objective, the presentation will summarize some of the elements of the general historical and economic background that has led to the development of Green Bonds, examine their possible relevance for sovereign issuers, and discuss a methodology to develop a due diligence process aimed to assess their effective linkage with green policies and their likely impact on the economy.

Chair: Iain Shuker (Practice Manager, GEN2A)

Discussants: Raffaello Cervigni (Lead Environmental Economist, AFR1), Olha Krushelnytska (Operations Officer, GEFPO), Dan Biller (Sector Manager, MIGEC)

Presenter: Pasquale L. Scandizzo. Professor. University of Rome “Tor Vergata”.

Bio: Pasquale L. Scandizzo holds a Ph.D. from the University of California, Berkeley and is presently Professor of Political Economy, Fellow of the Center for Economic and International Studies, Senior Fellow and Board Member of the Economics Foundation at the University of Rome “Tor Vergata”. He is also President of the Italian Association of Development Economists and President of Openeconomics, a university spin off focusing on project evaluation and economic development. His former institutional positions include the Chair of the Center for Economic International Studies, the Governing Board of the Italian Institute of Statistics, the Italian Institute for Economic Planning (President), the National Planning Board, the Parliamentary Budget Committee (Senior Adviser), the World Bank (Senior Economist).

Among many topics, his research, whose results have been widely published, concerns the relationship between institutions and economic development, with focus on risk aversion, the distribution of rights and the demand supply nexus in a general equilibrium framework. He has developed methodologies for the economic evaluation of public projects under uncertainty using real option theory and general equilibrium techniques and has been leading their application in both developed and developing countries.

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