Green bonds as an opportunity to rationalise local-government finances

Abstract

Subject and purpose of work: The purpose of the study was to identify the areas of activity of the local authorities in the context of the implementation of public tasks that could be financed with funds from the issue of the so-called green bonds. Materials and methods: The main research method was critical analysis of documents (using document of a normative nature and of various ranks) and the literature on broadly defined public finance and financial market issues. The individual case method, as well as inductive and deductive reasoning were also supportive in achieving the purpose of the study. Results: The study presents areas related to the provision of public services and identifies those of them which represent negative environmental impact. The identified characteristics of public task entities included provide the premise for answering the question: will an instrument such as the ‘green bonds’ constitute a secure source of funding? The study shows the evolution of legislative changes relevant to the implementation of environmentally sustainable projects while presenting the benefits of their implementation. Conclusions: The conclusions indicate the benefits of financing investments with funds from the issue of ‘green bonds’ for the budget of the local authority, the issuer and the bondholders.