Financing instruments for efficient building: analysis of green bonds and mortgages

Abstract

This document is the result of the subject Research Seminar, imparted by the Urban and Architectural Management and Valuation line, at the MBArch Master of the Polytechnic University of Catalonia. According to the United Nations Development Program, the measures we take today regarding climate change will have consequences that will last for a century or more. Building stock, responsible for a high percentage of CO2 generation and total energy consumption (in the European Union, buildings are responsible for 36% of the generation of carbon dioxide and 40% of final energy consumption) attracts the attention of governments and the international community, concerned with the generation of strategies to limit carbon emissions. The volume of capital managed by the financial sector invites governments to collaborate with it in the creation of a new, more energy-efficient housing stock. The Paris Agreement and the programs and regulations derived from it promote the creation of green financing instruments by the public and private sectors. The main objective of the study is to develop a state of the art on green financing: what is it, what are its antecedents in relation to agreements and regulations, what are the fundamental types and the most prominent examples. We focus especially on two financing instruments: green bonds (on a global scale) and green mortgages (in the United States, Mexico and the European Union, with special emphasis on Spain), in addition to two previous financing experiences outside this classification: The English case Green Deal and the German EnEv. The methodology used consists of a review, registration and analysis of different sources of information classified in: a) scientific articles, b) normative documents and c) institutional web pages, on green financing and its main instruments (green bonds and mortgages), analyzed from the perspective of regulation, dissemination and application. The analysis has revealed that there is no standardization for issuance and certification in any of the green funding cases. There is a search to homogenize these processes, with green bonds being the advantage over other financing mechanisms. In the mortgage outlook, the borrower disinformation about access; the lack of a single certification system that facilitates regulation; the possible insecurity for the investor; the very limited supply of products in countries such as Spain; the inequalities associated with access to these types of products, as well as the tendency to locate on the periphery of the homes registered with this type of financing, are some of the limitations observed during the study.