Finance Seminar with Jeffrey Wurgler, NYU Stern

The Department of Finance is proud to announce the upcoming seminar with Jeffrey Wurgler, NYU Stern.

Jeffrey Wurgler will present:

Financing the Response to Climate Change:  The Pricing and Ownership of U.S. Green Bonds

ABSTRACT
Estimates suggest that mitigating and adapting to climate change will cost trillions of dollars. We study green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes. After an overview of the U.S. corporate and municipal green bonds markets, we study pricing and ownership patterns using a simple framework that incorporates assets with nonpecuniary utility. As predicted, we find that green municipal bonds are issued at a premium to otherwise similar ordinary bonds. We also confirm that green bonds, particularly small or essentially riskless ones, are more closely held than ordinary bonds. These pricing and ownership effects are strongest for bonds that are externally certified as green.