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Pollution control bonds and environmental performance in energy utility firms: is there an incantation effect?

Imen Khanchel (Higher School of Commerce of Tunis, University of Manouba, Manouba, Tunisia)
Naima Lassoued (Higher School of Commerce of Tunis, University of Manouba, Manouba, Tunisia)
Ines Bargaoui (Higher School of Commerce of Tunis, University of Manouba, Manouba, Tunisia)

International Journal of Energy Sector Management

ISSN: 1750-6220

Article publication date: 12 September 2023

Issue publication date: 15 July 2024

64

Abstract

Purpose

This study aims to examine the effects of green financing through pollution control bonds (PCBs) on environmental performance.

Design/methodology/approach

This study is based on a panel of 189 US energy utility firms observed over the period, 2011–2021 ; this study applies Generalized Method of Moments regressions.

Findings

This study found that PCBs positively affect environmental performance (aggregate measure, greenhouse emissions, waste landfill, waste incineration and waste recycling). These findings remain robust when this study considers alternative measures of PCBs and environmental performance, the quantile regression method and some firms’ attributes such as financial performance and firm age.

Practical implications

The results indicate that US energy utility firms have to adopt more PCBs. This study helps researchers, practitioners, shareholders, bondholders, equity analysts and local authorities such as the California Pollution Control Financing Authority, municipalities and investors understand PCBs issuance, usefulness and relevance.

Originality/value

To the best of the authors’ knowledge, this study is the first to explore the effectiveness of PCBs in reducing pollution.

Keywords

Acknowledgements

The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the article.

Conflict of interest: The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Data availability statement: Data sharing is not applicable to this article as no new data were created or analyzed in this study.

Funding: The authors disclosed receipt of the following financial support for the research, authorship and/or publication of this article.

Author contributions: Imen Khanchel, conceptualization, theoretical background, editing. NaimaLassoued, Conceptualization, empirical design, writing; Ines Bargaoui, Data curation, writing.

Citation

Khanchel, I., Lassoued, N. and Bargaoui, I. (2024), "Pollution control bonds and environmental performance in energy utility firms: is there an incantation effect?", International Journal of Energy Sector Management, Vol. 18 No. 5, pp. 1066-1087. https://doi.org/10.1108/IJESM-02-2023-0014

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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