New Financing for Sustainable Development: The Case for NNP- or Inclusive Wealth–Linked Bonds

We propose that national governments could issue bonds whose interest payments are linked to green net national product (gNNP) or, almost equivalently, to inclusive wealth. The main intention of this new financial instrument is to entice investors and the national government to invest in human and n...

Full description

Saved in:
Bibliographic Details
Published in:The journal of environment & development 2017-06, Vol.26 (2), p.214-239
Main Authors: Yamaguchi, Rintaro, Managi, Shunsuke
Format: Article
Language:English
Subjects:
Assets
Bond issues
Bonding
Bonds
Capital
Central government
Financing
GNP
Government spending
Gross National Product
Inclusive wealth
Investors
Motivation
Payments
Public debt
Public finance
Social well being
Sustainability
Sustainable development
Tax revenues
Taxation
Wealth
Welfare economics
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We propose that national governments could issue bonds whose interest payments are linked to green net national product (gNNP) or, almost equivalently, to inclusive wealth. The main intention of this new financial instrument is to entice investors and the national government to invest in human and natural capital for which the corresponding financial assets currently do not exist. As the concept of wealth expands to include human and natural capital, so should the corresponding assets side in the balance sheet of nations. While the argument for gross national product (GNP)—linked bonds focuses on trimming public debt toward fiscal sustainability, the proposed bonds aim to ensure long-term sustainability. The theoretical link associated with welfare economics is also more plausible. Moreover, it could lead to the virtuous cycle of increased government expenditure directed toward inclusive wealth, expanding tax revenue, increased coupon payment to investors, and increased social well-being.
ISSN:1070-4965
1552-5465
DOI:10.1177/1070496516687344