Analysis Of The Environmental And Economic Effects Of Issuing Carbon-neutral Bonds

In recent years,global warming has intensified and environmental problems caused by climate change have become increasingly prominent.Reducing carbon emissions and curbing climate warming have gradually become a new round of global political consensus.The Paris Agreement put forward the goal of achieving global carbon neutrality by the middle of this century in 2015.Since then,many countries have put carbon neutrality on the agenda.In 2020,Chinese leaders have repeatedly put forward the goal of achieving carbon peaks before 2030 and carbon neutral before 2060 on major occasions.Carbon neutrality will become the direction of China’s economic transformation in the future.In order to support carbon neutrality,the domestic financial market has launched many innovative financial instruments to promote more capital allocation to the field of carbon emission reduction.In February 2021,the People’s Bank of China launched Carbon-neutral debt financing tools in the inter-bank market,and then six companies successfully issued the first batch of Carbon-neutral bonds.Carbon-neutral bonds are innovative sub-species of green bonds.Carbon-neutral bonds enrich the financing methods of enterprises and provide financial support for enterprises to reduce carbon emissions in the production process.Also,they provide investors who are concerned about ESG standards with suitable investment target.Therefore,the issue of the effect of the issuance of carbon-neutral bonds to be discussed in this article is of very important significance.This article starts with the definition of the concept of carbon-neutral bonds,and summarizes the current issuance status of Carbon-neutral bonds.At the same time,the first Carbon-neutral bond "21 Huaneng GN001" issued by HUANENG Power Int’l Inc,a representative company in the domestic power industry,is introduced.Then the framework of green bonds effects research is applied to the Carbon-neutral bonds to analyze the environmental effect,financial effect and stock price effect of "21 Huaneng GN001".The three effects are studied in different ways.Regarding environmental effects,we first clarify its definition,and then measure the carbon emission reduction benefits of projects that the Carbon-neutral bond finances.As for financial effects,by comparing the financial costs of Carbon-neutral bonds and ordinary bonds,we can explore whether the Carbon-neutral bond has financing advantages.The stock price effect uses the event research method to analyze the impact of the issuance of the Carbon-neutral bond on the stock price.Finally,this thesis synergizes the three effects to analyze the significance of the issuance of Carbon-neutral bonds for the green transition of enterprises and industries.The results show that the issuance of Carbon-neutral bonds can help companies reduce carbon emission,and companies can convert environmental benefits into economic benefits through carbon rights auctions.Secondly,the Carbon-neutral bond issued this time did not show obvious financing advantages.This may be caused by the lack of differentiation in rating certification and insufficient market environment preferences.Finally,the issuance of Carbon-neutral bond has a positive impact on the company’s stock price.The synergistic analysis shows that the Carbon-neutral bonds promote the green development of the company and the industry through the interaction of three effects above.Through the analysis,this article finally puts forward some suggestions from the perspectives of countries,enterprises and investors,hoping to help the further development of China’s Carbon-neutral bonds market.