Final Project_draft 2

Overview of the green bond market in 2017-2022

Over the recent years total amount of global green bonds issuance increased from USD 100 bln in 2017 to almost USD 550 bln in 2022. However, tendencies in developing and developed countries were different. Thus, the purpose of this work is to analyze these tendencies across the countries and identify key priorities in financing sustainable projects.

As for developing countries, total amount of green bonds issued in selected countries increased almost 3 times since 2017. In 2022 this indicator equaled to USD 120 bln, while in 2017 only to USD 40 bln. The absolute leader among developing countries in green bonds issuance is China. Almost 82 percent of total green bonds issuance in 2022 accounted for China.

> my_colors <- c("#1f77b4", "#ff7f0e", "#2ca02c", "#d62728", "#9467bd", "ivory", "#e377c2")

> ggplot(gb2, aes(x = Year, y = Value, fill = Country)) +
+ geom_bar(stat = "identity", position = "stack") +
+ scale_fill_manual(values = my_colors) +
+ labs(x = "Year", y = "bln USD", fill = "Country") +
+ ggtitle("Total amount of green bonds issued in developing countries") +
+ labs(subtitle = "2017-2022", caption = "Source: Green Bonds, Climate Change Indicators Dashboard, IMF | Latest Data: 2022 | Calculations by Olga") +
+ theme_classic()

Comparing to developing countries the green bond market in selected developed countries is larger and more homogeneous. Since 2017 it increased from USD 50 bln to USD 200 bln in 2022. However, total amount of green bonds issuance decreased almost 35 persent in 2022. Such significant reduction can be explained by energy market turmoil. The European countries lead the market. Almost 39 percent of total green bond issuance in 2022 accounted for Germany, 15 percent - the Netherlands, 13 percent - France.

> gb3 <- read_excel("C:\\Users\\Olga Z\\Documents\\00_data_raw\\Green_Bond3.xlsx")
> ggplot(gb3, aes(x = Year, y = Value, fill = Country)) +
+ geom_bar(stat = "identity", position = "stack") +
+ scale_fill_manual(values = my_colors) +
+ labs(x = "Year", y = "bln USD", fill = "Country") +
+ ggtitle("Total amount of green bonds issued in developed countries") +
+ labs(subtitle = "2017-2022", caption = "Source: Green Bonds, Climate Change Indicators Dashboard, IMF | Latest Data: 2022 | Calculations by Olga") +
+ theme_classic()

Most of green bonds were dominated in euros, US dollar and Chinese yuan. Almost 43 percent of cumulative green bond issuances were dominated in euros, 25 percent in US dollars and 14 percent in Chinese yuan. Green bonds dominated in other currencies equal to 18 percent of total amount.

> my_colors <- c("#1f78b4", "#33a02c", "#e31a1c", "#ff7f00", "#6a3d9a",
+                         "#a6cee3", "#b2df8a", "#fb9a99", "#fdbf6f", "#cab2d6")
> gb4 <- read_excel("C:\\Users\\Olga Z\\Documents\\00_data_raw\\Green_Debt3.xlsx")
> ggplot(gb4, aes(x="", y=share, fill=currency)) +
+ geom_bar(stat="identity", width=1) +
+ coord_polar(theta="y") +
+ ggtitle("Cumulative Green Bond Issuances by Type of Currency") +
+ labs(subtitle = "Cumulative - All Years") +
+ labs(caption = "Source: Green Bonds, Climate Change Indicators Dashboard, IMF | Latest Data: 2022 | Calculations by Olga") +
+ scale_fill_manual(values=my_colors) +
+ theme_void()

Clean transport, energy efficiency and adaptation projects are key priorities in green bonds financing. Almost 70 percent of financing (or USD 1.6 trl) was used to finance these types of projects. That means that financial resources are highly concentrated and other types of projects can be under-financed.

> gb1 <- read_excel("C:\Users\Olga Z\Documents\00_data_raw\Green_Debt2.xlsx")
> ggplot(gb1, aes(x="", y=share, fill=type)) + + geom_bar(stat="identity", width=1) +
+ coord_polar(theta="y") +
+ ggtitle("The key priorities in financing sustainable projects") +
+ abs(subtitle = "Cumulative - All Years") +
+ labs(caption = "Source: Green Bonds, Climate Change Indicators Dashboard, IMF | Latest Data: 2022 | Calculations by Olga") +
+ scale_fill_manual(values=my_colors) +
+ theme_void()