Green bonds and carbon emissions

Municipal green bonds are issued to fund projects with an environmental purpose. Whether issuance is followed by lower county-scale carbon emissions is a harder question, because counties that issue green bonds also differ in income, infrastructure, and commuting patterns.

This paper uses a causal forest in a double machine learning framework on U.S. municipal green bonds issued from 2009 to 2019. Emission changes are uneven across counties and grow over time. The associated paper in Environmental Science & Technology (2025) reports an implied abatement cost of $192 per ton of CO2, with stronger reductions in counties that have more small and medium-sized employers.