Research On Financing Motivation And Economic Consequences Of Issuing Carbon Neutral Debt Under Dual Carbon Target

In recent years,as environmental problems become more and more prominent and the ecological problems brought by global warming become more and more serious,the study of carbon emissions has received more and more attention.In the process of promoting the "double carbon" target,the financial market needs to be guided to provide financing support.The creation of carbon neutral bonds is an emerging financial product in the context of carbon neutrality,which provides a new financing method for enterprises and is specifically used for carbon emission reduction.The special feature of carbon emission reduction provides a boost to achieve the "double carbon" target.As a power company,Huaneng International’s energy structure is mainly thermal power,and the progress of carbon emission reduction greatly affects the progress of achieving the "double carbon" target.This paper firstly introduces the concepts of green bonds and carbon neutral bonds,and clarifies the theoretical foundations involved in the paper,such as sustainable development theory,preferential financing theory,information asymmetry theory and social responsibility theory.Secondly,we will compare and analyze the characteristics of carbon neutral bonds on the basis of green bonds,introduce the background of issuance based on the response to the goal of "double carbon" and national policy support,and describe the current situation of carbon neutral bonds in China since the issuance of carbon neutral bonds in 2021 in terms of the scale and quantity of issuance,issuing entities,bond credit rating,bond type and issuance period.It also shows that there are three existing problems in the development of carbon neutral bond market,one of which is that market players are not active enough and the total amount of issuance is relatively small,the other is that the system needs further improvement and the encouragement policy is not strong enough,and the third is that the carbon emission reduction area is not focused and the quality of information disclosure is not enough.Huaneng International,as one of the first issuers of carbon neutral bonds,is one of the leading enterprises in the power industry,and the two carbon neutral bonds issued by Huaneng International,"21 Huaneng GN001" and "21 Huaneng GN002",are studied in this paper.The article takes the motivation of the issuance as the starting point.The article takes the motivation of issuance as the starting point,specifically to meet the goal of "double carbon",to practice the concept of green development,to help the low-carbon transformation of the power industry,to reduce financing costs and meet the demand for green project funds,and to meet the corporate development strategy,so as to analyze the reasons for Huaneng International,as a large central enterprise,to issue two carbon neutral bonds.Then,we analyze the economic consequences of Huaneng International’s issuance of carbon neutral bonds in terms of financial effect,environmental effect,social effect and stock price effect,mainly including: in terms of financial effect,the issuance of carbon neutral bonds can reduce financing cost,adjust capital structure and improve debt servicing capacity.In terms of environmental effects,the issuance of carbon neutral bonds can reduce carbon emissions and quantify the financial value of carbon emission reduction based on the average price in the carbon trading market;in terms of other environmental benefits,the issuance of carbon neutral bonds can save environmental taxes based on emission reduction,which can save costs for enterprises.In terms of social benefits,the issuance of carbon neutral bonds is conducive to promoting the development of the carbon neutral bond market,enhancing the company’s reputation and helping to achieve the "double carbon" goal.Finally,in terms of stock price effect,the issuance of two carbon neutral bonds by Huaneng International has raised the company’s stock price in the short term,as investors have positive expectations for it.Based on the case study,the article concludes with a summary and puts forward targeted suggestions to address the existing problems in the carbon neutral bond market.Companies should seize the carbon neutral opportunity,accelerate the green and low-carbon transformation,improve the market system,increase policy subsidies,focus on the use of proceeds and improve the information disclosure system in order to contribute to the healthy development of China’s carbon neutral bond market.