Abstract: Green bonds are conducive to solving the contradiction between economic development and environmental protection. In order to further promote the development of green bonds, local governments have successively issued preferential policies, but do preferential policies really improve the environmental benefits of green bonds? This paper takes the green bonds issued by A-share listed companies from 2016 to 2023 as a sample, constructs a quantitative function for calculating environmental benefits of green bonds, and uses a multi period double difference model to study the impact of local government preferential policies on the environmental benefits of green bonds. The findings show that: (1) Local government preferential policies can significantly improve the environmental benefits of green bonds, and direct preferential policies have a more significant effect on improving the environment; (2)Local government preferential policies improve the environmental benefits of green bonds by easing financing constraints, enhancing investor confidence, and strengthening media supervision; (3) The “two-carbon” strategy has an effect of incentivizing local governments to enhance environmental benefits through preferential policies, and the improvement effect is more pronounced in state-owned enterprises and enterprises in areas where green finance is highly developed and environmental governance is robust. This paper has important theoretical value for understanding how local government preferential policies affect the environmental benefits of green bonds, and also provides reference for regulatory authorities to improve green bond preferential policies.

Key words: green bonds, preferential policies for local governments, environmental benefit