Green Finance and Green Energy Nexus in ASEAN Countries: A Bootstrap Panel Causality Test

Abstract

Green energy is a crucial component in addressing expanding energy demands and combating climate change, but the possible negative repercussions of these technologies are frequently disregarded. Green energy’s deployment is tied to environmentally sustainable development goals (SDGs). It can only be achieved by scaling up the finance of investment that provides environmental benefits through new financial instruments and new policies, such as green banks, green bonds, community-based green funds, green central banking, etc. In an effort to address the issues with IPAT and ImPACT, this study employed the STIRPAT model approach, which is a proven framework for energy economics analysis. The author gathers yearly data spanning 2002–2018 for six ASEAN member countries with the aim of investigating the relationship between CO2 emissions, green finance, energy efficiency, and the green energy index (GEX). After preliminary tests, the study employed the Westerlund test and Johansen Fisher test for long-term equilibrium and estimated the Granger causal links between variables using the generalized method of moments (GMM). The results indicate that green bonds are an effective technique for promoting green energy projects and considerably reducing CO2 emissions. Therefore, governments should establish supporting policies with a long-term perspective to increase the investment of green energy projects related investment from private participants to ensure sustainable growth and address environmental challenges. This strategy may be appropriate during and after the COVID-19 period.

Causal Linkage among Agricultural Insurance, Air Pollution, and Agricultural Green Total Factor Productivity in United States: Pairwise Granger Causality Approach

“…The Malmquist index approach has certain benefits, such as the fact that it does not require any price information to estimate TFP; nevertheless, it also has some drawbacks. In particular, it is sensitive to the group of nations being contrasted as well as the number of variables being accounted for in the model [42]. Estimates of TFP are likely to be plagued by measurement inaccuracies if they are not based on a representative sample of many nations.…”

Leveraging green finance and technological innovations for sustainable urban development: A comparative study of Chinese mega-cities

“…suggested that green credit imposes credit limitations on highly polluting enterprises, hence increasing the requirements for corporate funding. Consequently, corporations are compelled to take measures to avoid environmental pollution right from its origin [ 50 ]. also contend that green credit has diminished the financial capability of significantly polluting enterprises [ 51 ].…”

A panel data method towards the effectiveness of sources of finance in stimulating the realisation of renewable energy technologies: Empirical evidence for Asia‐Pacific

“…Nevertheless, there is another view that debate that financial institutions are less likely to finance firms dealing with green technologies provided the government sector has good information regarding the hazard linked with innovative projects (Ahmed et al, 2022; Beniwal & Kumar, 2020; Ionescu, 2023; Olmos et al, 2012). This is because banks tend to reduce their financial risks by investing in close‐to‐market technologies, which are able to produce market revenues already in the short‐to‐medium term.…”

“…Therefore, the expansion of renewable energy technologies (RETs) makes it possible to strengthen energy security by diversifying the energy mix, while contributing to a reduction in fossil fuel dependence and greenhouse gas (GHG) emissions (Roslan, 2021). Many countries have taken the step to promote renewables with environmental policy frameworks (Ahmed et al, 2022); however, they still report a low fraction of world electricity production. 1 This reality proposes that there are still some deficient connections between the possible benefits of renewables and their execution, and these missing links need investigating.…”