Authors study the drivers of the spread of U.S. municipal green bonds over U.S. Treasury bonds. The spread is estimated using synthetic Treasury bonds priced from the Treasury spot-rate curve and constructed to match green bond-specific cash-flow features. Using 2,912 AAA-rated U.S. municipal green bonds with daily yields from July 2009 to June 2023, they show that spread dynamics are mainly explained by macrofinancial variables and major market or policy shocks, such as the Treasury yield-curve slope, the clean-energy index, gold prices, the Flash Crash, the U.S. credit-rating downgrade, and COVID-19 emergency rate cuts. […]