The Risk in Moody's Global Rating and Institutional Image in Emerging Countries Issuing Carbon Credit: NTN-G and Carbon Tokenization in Brazil

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a theoretical and empirical framework linking carbon markets to sovereign debt risk and valuation, useful for research on green finance and climate policy.

🏢実務担当者:Showcases a real-world example of tokenized carbon credits in public debt, offering insights for structuring green bonds and integrating sustainability into treasury operations.

🏛政策担当者:Highlights how carbon credit integration can improve sovereign credit ratings and attract ESG investors, relevant for countries designing green bond programs.

ABSTRACT Chapter 1. The classic origin of the National Treasury credit confidence and innovations in public debt.  This chapter proposes a theoretical and historical reconstruction of the origin of confidence in sovereign debt instruments, with special attention to their contemporary resignification through the issuance of green government bonds, such as the NTN-G. The debate starts from Adam Smith's classic formulations in The Wealth of Nations, where credit is based on the division of labor and economic interdependence, and extends to Max Weber's Cartalist conception, which understands money as an institutional artifact whose legitimacy rests on the power of the State. The evolution of public debt — from personal promises between subjects and monarchs to standardized market instruments — gains a new layer with the rise of sustainable finance, in which environmental performance directly interferes with the risk and price of sovereign debt. This change represents more than a market innovation: it is the incorporation of a new institutional logic, in which environmental credibility becomes a relevant variable for the calculation of state solvency. In the Brazilian context, the NTN-G (Green National Treasury Note) is analyzed as a pioneering experiment in tokenization of public debt based on carbon credits, establishing bridges between state financing, the regulated emissions market, and international investor confidence. Based on the concepts of Weberian social trust, rational expectations (as formalized by Romer), and intertemporal capital equilibrium (according to Wickens), the chapter demonstrates that green fiscal credibility depends on new factors: environmental regulatory stability, sovereign ESG metrics, digital governance of green assets, and convergence between monetary and climate policy. Thus, public debt ceases to be merely a mechanism for anticipating revenue and becomes an instrument for the structural transformation of the economy. The chapter inaugurates the thesis with the hypothesis that confidence in the National Treasury, in the 21st century, comes to depend not only on financial solvency, but also on the digitally verifiable environmental reputation of the State — paving the way for the models and simulations in the following chapters.Chapter 2, Fundamentals: Monetary Policy, Risk and Volatility in Global Markets. The NTN-G arises as a response to the search for sovereign instruments that reconcile fiscal policy responsibility, environmental goals and innovation. In the Friedmanian tradition, the PQ = MV ratio  is taken up to assess the effects of monetary issuance associated with green public debt (Krugman et al., 2015). Wickens' (2012) intertemporal modeling offers a dynamic equilibrium view to understand how the indexation of NTN-G to carbon changes the incentives for consumption and investment. The IS-PM model, which replaces the LM with an active monetary policy function, allows for the analysis of shocks to the IS Curve via changes in sovereign risk and credit spreads. The volatility associated with carbon prices is a key variable directly interfering with the interest on public debt. Chapter 3, Tokenization, Emission Metrics, and the Global System. The tokenization of carbon credits, led by iCarbon in the NTN-G framework, represents an institutional advance that requires new metrics. As proposed by Freeman III, A. M., Herriges, J.A., & Kling, C. L. (2014), in "The Measurement of Environmental and Resource Values: Theory and Methods", the measurement of environmental benefits and the calculation of shadow prices are essential to determine the effectiveness of sustainable public policies. The integration of green accounting with systems such as the Mantra of international transfers of value and the proposal of sustainable assets propose an institutional architecture of transparency and governance. The digitalization of credits and the adoption of international verification standards (e.g. ICMA Green bonds principles, EU Taxonomy) make it possible to consolidate Brazil's institutional image in the international financial market, reducing financing costs and attracting ESG funds. Chapter 4, Projections, funding and benefits. The issuance of the NTN-G is projected as a structuring instrument for the Brazilian sustainable transition. The paper's projections indicate that by 2028: the issuance will reach R$ 650 billion, the growth of the carbon credit market will be 7% per year and the improvement in the institutional image in the sovereign rating (Moody's: +2.5 points).  In addition to the sustainable benefit, there is a direct impact on the cost of debt: the "greenium" observed in green bonds (lower return required by investors) and the reduction in projected volatility (from 7% to 5.8%) reinforce the financial viability of the policy. By reconciling classical monetary theory with behavioral approaches and financial innovation, NTN-G repositions Brazil as a relevant exponent in the sustainable finance market – with simultaneous gains in credibility, sustainability, and governance.

• openaire https://doi.org/10.5281/zenodo.19237530first seen 2026-05-14 21:55:41