Muni-Bond Buyers Want Tax Breaks. Saving the Earth? Not Much
- States don’t get lower borrowing costs from green bonds: study
- Wall Street charges about 10 percent more on green bond deals
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There appears to be a good reason why states and cities don’t go out of the way to market their bonds to environmentally conscious investors: it doesn’t save them any money.
That’s the conclusion from a study by Stanford University accounting professor David Larcker and Edward Watts, a doctoral student at the business school there. Instead, they found that governments wind up paying higher fees to bankers when they sell certified green bonds than they do when they forego that brand, based on a review of debt issued for clean water, commuter trains, solar energy and other such projects.