https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/ 9  4  The second problem is the price that the markets assign to these assets and the higher costs associated with their issue. The issue of a green asset involves additional costs for the issuer, as it is necessary to hire a certifying company for the issue of the green bond and to pass regular audits to be able to continue to use the label over the lifetime of the bond. Thus, issuing a green bond will only be worthwhile for the issuer if it can sell such bonds at a higher price than normal bonds. At the moment, this is the case, given that there is a negative premium in their favour (greenium), which shows the greater appetite of certain investors for these assets. And the third problem arises from the limitations inherent in bond markets. Access to bond financing, due to its high fixed costs, is restricted to issuers requiring large volumes. It is currently unimaginable that SMEs or households would issue bonds to make the transition towards a more efficient economy less based on greenhouse gas emissions. For this transition to occur it is therefore necessary for a green credit market to be developed, in which banks will have a fundamental role to play. This is particularly important in countries like Spain, in which banks intermediate the bulk of funds between savers and investors. For this purpose, it is crucial that banks include these types of considerations in their analysis.

For appropriate economic policies to be designed and implemented in the climate sphere it is also essential to understand that, in the transition to a more sustainable economy, there will be individuals, sectors and even countries whose welfare will inevitably be reduced (at least during the phase of transition to a new stationary state). Our responsibility for economic policy means we must properly identify those who are most likely to become “losers” and to take measures to mitigate the net negative impact on them of the transformation into a more sustainable economy. To illustrate this, let me use an example that I have referred to on other occasions:7 the globalisation debate. From the standpoint of economic theory there is little doubt that international trade has a net positive effect on the level of activity and global welfare. However, we know that in reality this is so when we compare aggregate aspects of the economy in two different equilibria, one with little international trade and another with a high 5  https://www.bankingsupervision.europa.eu/ecb/pub/ra/html/ssm.ra2020~a9164196cc.es.html#toc3 See the latest progress report of the Task Force on Climate-related Financial Disclosures (2019), available at: https://www.fsb-tcfd.org/wp-content/uploads/2019/06/2019-TCFD-Status-Report-FINAL-053119.pdf 7 Pablo Hernández de Cos (2019), Global Imbalances and Capital Flows in the Era of New Technologies, opening remarks, Banco de España and the Reinventing Bretton Woods Committee. Available at: https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/IntervencionesPublicas/Gobernador/Arc/Fic/h dc100919.pdf 6  Pablo Hernández de Cos (2020), “Multilateralism and globalisation reforms”, presentation of the book Excesos: amenazas a la prosperidad global, by Emilio Ontiveros. Available at: https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/IntervencionesPublicas/Gobernador/Arc/hdc280120en.pdf  3  level.