Do Green Bonds Play a Role in Achieving Sustainability?

Abstract

Green bonds play a pivotal role in promoting sustainability by channeling financial resources towards environmentally friendly projects, fostering a greener and more resilient future. This research investigates the role of “Green Bonds” in the attainment of Sustainable Development Goals (SDGs), focusing on two specific goals: climate action, represented by per capita carbon emissions (CO2), and clean energy, represented by per capita renewable energy production. Using data from 2007, when the first green bond was issued, up to 2021, we employed a one-step generalized method of moments (GMM) model to explore how green bonds impact global emission reduction and the increase in renewable energy production. The findings demonstrate that green bonds have a significant influence on both emissions and renewable energy production. Specifically, green bonds and renewable energy production have a positive and significant association, while emissions exhibit a negative relationship with green bonds. Our results reported a reduction in carbon emissions up to 0.8 tons, while an increase in renewable energy up to 66 kWh. Upon analyzing the data before and after 2015, we observe that prior to 2015, there was no significant effect of green bonds on emissions and renewable energy production. However, after 2015, green bonds substantially impacted both indicators. Furthermore, our results indicate that countries with higher green bond issuance are more likely to achieve their sustainability goals, particularly in terms of renewable energy production and carbon emission reductions. Conversely, countries with lower green bond issuance are struggling to attain their sustainability objectives in these areas.

Green Shocks: The Spillover Effects of Green Equity Indices on Global Market Dynamics

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How Can Financial Innovation Curb Carbon Emissions in China? Exploring the Mediating Role of Industrial Structure Upgrading from a Spatial Perspective

“…Thirdly, the financial innovations studied in this paper possess greater exploratory value and applicability compared to the existing literature that predominantly focuses on novel financial products, such as green bonds [75,76]. Although existing studies have extensively explored the positive impact of green bonds or green project investments on sustainable development, they are relatively new financial products that are more associated with corporate social responsibility sentiment and government guidance.…”

Spillover Effects of Green Finance on Attaining Sustainable Development: Spatial Durbin Model

“…By strategically applying green finance in densely populated areas, communities drive positive impacts on their environment and social well-being, contributing to broader sustainability objectives [41][42][43]. Scholars [44][45][46] show that green finance's ability to channel funds into eco-friendly projects leads to reduced energy consumption and alignment with SDGs such as clean energy and climate action. However, the studies [47][48][49] outline that green finance might divert resources from essential sectors, promote surface-level changes without addressing systemic issues, and even be prone to "greenwashing", where initiatives appear environmentally friendly without substantial impact.…”