Tax Incentives Provided for Green Bonds in Financing of Energy Efficiency and Its Importance for Turkey

Energy efficiency is of vital importance for Turkey as one of the elements of sustainable development. Turkey is faced with difficulties in providing sustainable development due to its dependence on imported energy. In addition, the impacts of climate change have a negative effect on Turkey’s environment and economy. Turkey is therefore involved in international efforts to combat global climate change and reduce greenhouse gas emissions. As for many countries, financing of energy efficiency is also a significant issue for Turkey. As an alternative to financing energy efficiency, green bonds are developing rapidly all over the world. Green bonds are financial instruments that provide opportunities for investors to participate in the financing of “green” projects that help reduce the negative impacts of climate change and adapt to the impacts of climate change, reduce CO2 emissions, prevent environmental pollution, and improve social welfare.These structures have important effects on the realization of sustainable development. Turkey’s first and only green bond was issued by the Industrial Development Bank of Turkey in 2016 and attracted investors’ attention.Countries such as the US, China and Chile apply tax incentives for green bonds to attract investors. However, level of awareness of green bonds in Turkey is low and there are no tax incentives yet. Necessary measures should be taken to facilitate financing of energy efficiency in Turkey and tax incentives should be implemented for green bonds. In this paper, the development and types of green bonds in the world and Turkey, tax incentives provided for green bonds in financing of energy efficiency in the world and Turkey, and recommendations for Turkey were discussed.

Keywords: Green bonds, green bond principles, tax incentives, energy efficiency, sustainable energy, sustainable development

JEL Classification : H23 , K34 , P18 , P48 , Q01 , Q28 , Q42 , Q48 , Q54 , Q56

References

Ata, S.U. (2013). “Sürdürülebilir Enerjinin Finansmanı”, Türkiye’de İklim Değişikliği ve Sürdürülebilir Enerji, (Ed.) Ediger, V. Ş., İstanbul, ENİVA-Enerji ve İklim Değişikliği Vakfı, ss.99-119. google scholar
Bahuet, C. (October 8, 2018). Indonesia’s green sukuk, https://www.undp.org /content/undp/en/home/blog/2018/Indonesias-green-sukuk.html (20.02.2019). google scholar
Berensmann, K., Dafe F. , Kautz M. & Lindenberg N. (2016). Green bonds: taking off the rosecoloured glasses, Briefing Paper, 24/2016, Department “World Economy and Development Financing“, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE). http://www.die-gdi.de/uploads/media/BP_24.2016.pdf (28.01.2019). google scholar
Boulle, B., Dai, L. & Meng, A (2017). China Green Bond Market 2016, Climate Bonds Initiative & The China Central Depository & Clearing Company (CCDC), January. https://www. climatebonds.net/resources/reports/china-green-bond-market-2016-0 (22.02.2019). google scholar
Ceres (2014). Green Bond Principles, 2014, Voluntary Process Guidelines for Issuing Green Bonds, Ceres Report, January 13, 2014. https://www.ceres.org/sites/default/files/reports/2017-05/ Green%20Bond %20 Principles.pdf (18.02.2019). google scholar
Chiang, J. (January 2017). Growing the U.S. Green Bond Market: Volume 1, California State Treasurers Office. http://treasurer.ca.gov/greenbonds/publications/reports/1.pdf (18.02.2019). google scholar
ESCARUS (2018). Dönüşen Dünyada Fırsatları Yakalamak: Sürdürülebilir Finans Görünümü , Eylül 2018. İstanbul. http://www.escarus.com/raporlar-ve-analizler (17.02.2019). google scholar
Flaherty, M. , Gevorkyan, A. Radpour, S. & Semmler, W. (2017). Financing climate policies through climate bonds – A threestage model and empirics, Research in International Business and Finance, 42 (2017), pp. 468–479. google scholar
Gelir İdaresi Başkanlığı (2019).G.V.K. Geçici 67 nci Madde Uygulaması İle İlgili Olarak Gerçek Kişilere Yönelik Vergi Rehberi, Mükellef Hizmetleri Daire Başkanlığı Yayın No: 313 Şubat 2019, Ankara. google scholar
Green Bonds: Review of 2017. https://www.environmental finance.com/assets/files/Green%20 Bonds%20Review%20of%202017.pdf (16.02.2019). google scholar
https://www.climatebonds.net/policy/policy-areas/tax-incentives (15.01.2019). google scholar
http://www.yegm.gov.tr/verimlilik/destekler.aspx. (20.02.2019). google scholar
IBRD (2015). What Are Green Bonds?, International Bank for Reconstruction and Development –The World Bank, Washington, http://documents.worldbank.org/curated /en/400251468187810398/pdf/99662-REVISED-WB-Green-Bond-Box393208B-PUBLIC. pdf (15.02.2019). google scholar
International Capital Market Association (June, 2018), Green Bond Principles Voluntary Process Guidelines for Issuing Green Bonds, https://www.icmagroup.org/green-social-andsustainability-bonds/green-bond-principles-gbp/ (16.02.2019). google scholar
Kandır, S.Y. & Yakar, S. (2017a). “Yeşil Tahvil Piyasaları: Türkiye’de Yeşil Tahvil Piyasasanın Geliştirilebilmesi İçin Öneriler”, Ç.Ü. Sosyal Bilimler Enstitüsü Dergisi, 26 (2), ss. 159-175. google scholar
Kandır, S.Y. & Yakar, S. (2017 b). “ Yenilenebilir Enerji Yatırımları İçin Yeni Bir Finansal Araç: Yeşil Tahviller”, Maliye Dergisi, 172, ss. 85-110. google scholar
Reichelt, H. (2010). Green Bonds : A Model to Mobilize Private Capital to Fund Climate Change Mitigation and Adaptation Projects (English). Euromoney Handbook. Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/ 680921507013408005/ Green-bonds-a-model-to-mobilize-private-capital-to-fund-climate-change-mitigation-andadaptation-projects (22.02.2019) google scholar
Reboredo, J. C. (August, 2018). “Green Bond and Financial Markets: Co-Movement, Diversification and Price Spillover Effects”, Energy Economics, (74), pp.38–50, https://doi.org/10.1016/j. eneco.2018.05.030 (05.01.2019). google scholar
Tang, D.Y. &, Zhang , Y. (2018). “Do shareholders benefit from green bonds?”, Journal of Corporate Finance (Corfin), Artical in press, https://doi.org/10.1016/j.jcorpfin. 2018.12.001. google scholar
TSKB (2017). Green/ Sustainable Bond, Allocation & Impact Reporting 2017. http://www.tskb. com.tr/web/101-3133-1-1/tskb-site-tr/tr-hakkimizda/tskbden-haberler/yesil/surdurulebilirtahvil-ile-yaratilan-degeri-anlatan-allocation-impact-reporting-2017-yayinlandi (20.02.2019). google scholar

34. International Public Finance Conference

CHAPTER

Tax Incentives Provided for Green Bonds in Financing of Energy Efficiency and Its Importance for Turkey

References

SHARE