Sovereign debt will be vital in stimulating sustainable investment, but information is lacking on how green public spending actually is.
The authors are grateful for very helpful comments from Moritz Krämer, Patrice Cochelin and Paul Munday in the context of a related project, undertaken with Stavros Zenios.
International debt investors increasingly demand assets that are aligned with environmental, social and governance objectives. Sovereign debt is being belatedly swept up in this change. This huge asset class represents a uniquely long-term claim and funds a wide range of public expenditure, both brown and green. Public capital expenditures will be a central part of the roughly €3 trillion investment budget needed to pay for the European Green Deal.
European Union countries have so