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Cost efficiency of municipal green bonds’ measures: a marginal abatement cost curves approach

This paper aims to investigate the cost-efficiency of the carbon reduction measures financed in Swedish municipalities through the scheme of municipal green bonds using the marginal abatement cost curves (MACCs) methodology.

Tommaso Piseddu, Fedra Vanhuyse / Published on 21 December 2023

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Piseddu, T., & Vanhuyse, F. (2023). Cost efficiency of municipal green bonds’ measures: a marginal abatement cost curves approach. Studies in Economics and Finance.

Gothenburg, Sweden

Gothenburg, Sweden

Photo: Aron Fjell / Unsplash


With more cities aiming to achieve climate neutrality, identifying the funding to support these plans is essential. The purpose of this paper is to exploit the present of a structured green bonds framework in Sweden to investigate the typology of abatement projects Swedish municipalities invested in and understand their effectiveness.

Design / methodology / approach

Marginal abatement cost curves of the green bond measures are constructed by using the financial and abatement data provided by municipalities on an annual basis.


The results highlight the economic competitiveness of clean energy production, measured in abatement potential per unit of currency, even when compared to other emerging technologies that have attracted the interest of policymakers. A comparison with previous studies on the cost efficiency of carbon capture storage reveals that clean energy projects, especially wind energy production, can contribute to the reduction of emissions in a more efficient way. The Swedish carbon tax is a good incentive tool for investments in clean energy projects.

Originality / value

The improvement concerning previous applications is twofold: the authors expand the financial considerations to include the whole life-cycle costs, and the authors consider all the greenhouse gases. This research constitutes a prime in using financial and environmental data produced by local governments to assess the effectiveness of their environmental measures.

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SEI authors

Tommaso Piseddu
Tommaso Piseddu

Research Associate

SEI Headquarters

Fedra Vanhuyse
Fedra Vanhuyse

Head of Division: Societies, Climate and Policy Support

SEI Headquarters

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Studies in Economics and Finance Open access
Topics and subtopics
Climate : Finance / Governance : Finance
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