Abstract

FERNANDEZ-TELLERIA, Bernardo X.  and  UZQUEDA, María Cecilia. The “Green Premium” in Sustainable Finance: Reflections for Bolivia. rlde [online]. 2023, n.especial, pp.57-74.  Epub Nov 30, 2023. ISSN 2074-4706.  https://doi.org/10.35319/lajed.2023esp311.

The existence of a green financial premium, defined as the positive spread between the yield of a conventional bond or financial instrument relative to its green or sustainable counterpart, implies that an investor or creditor is willing to accept a lower return for the green or sustainable asset relative to its conventional equivalent. Such an arrangement could significantly facilitate and accelerate the role of sustainable finance in global climate action and the achievement of the Sustainable Development Goals. This is because it allows the actors involved to share responsibilities for solving the problem ofclimate change, understood as the greatest “tragedy of the commons” faced by humanity. This document presents the main definitions and analyzes the empirical evidence on the green premium at the global and local scale, to offer reflections and policy recommendations for Bolivia.

Keywords : Sustainable finance; tragedy of the commons; green premium; climate change; Bolivia.

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