Testing role of green financing on climate change mitigation: Evidences from G7 and E7 countries

Abstract

The study estimates the long-run dynamics of a cleaner environment in promoting the gross domestic product of E7 and G7 countries. The recent study intends to estimate the climate change mitigation factor for a cleaner environment with the GDP of E7 countries and G7 countries from 2010 to 2018. For long-run estimation, second-generation panel data techniques including augmented Dickey-Fuller (ADF), Phillip-Peron technique and fully modified ordinary least square (FMOLS) techniques are applied to draw the long-run inference. The results of the study are robust with VECM technique. The outcomes of the study revealed that climate change mitigation indicators significantly affect the GDP of G7 countries than that of E7 countries. The GDP of both E7 and G7 countries is found depleting due to less clean environment. However, green financing techniques helps to clean the environment and reinforce the confidence of policymakers on the elevation of green economic growth in G7 and E7 countries. Furthermore, study results shown that a 1% rise in green financing index improves the environmental quality by 0.375% in G7 countries, while it purifies 0.3920% environment in E7 countries. There is a need to reduce environmental pollution, shift energy generation sources towards alternative, innovative and green sources.The study also provides different policy implications for the stakeholders guiding to actively promote financial hedging for green financing. So that climate change and envoirnmental pollution reduction could be achieved effectively. The novelty of the study lies in study framework.

The impact of natural resource rent, financial development, and urbanization on carbon emission

“…Moreover, QARDL has various advantages, such as it allows investigating the relationships among constructs in long-term and short-run dynamics throughout "a span of quantiles of the conditional distribution" of understudy constructs (Mensi et al 2019;Othman et al 2020;Sadiq et al 2021b). In addition, it also allows for locational asymmetry among the constructs according to the location of the understudy constructs within its conditional distribution (Lahiani 2018;Sadiq et al 2021a;Xueying et al 2021). Finally, QARDL lets the cointegrating coefficients to modification over the innovation quantile originated from shocks (Shahbaz et al 2018).…”

Testing green fiscal policies for green investment, innovation and green productivity amid the COVID-19 era

“…In addition, their distributional impacts, as well as their trade-offs, have not been discussed (Jiang et al 2021;Sadiq et al 2021Sadiq et al , 2020. Simulation methods such as the integrated assessment models (IAMs) are not capable of representing a complex system in which several sector-to-to-sector feedback mechanisms, as well as temporal lags, impact macroeconomic conditions and business strategy simultaneously (Agyekum et al 2021;Xueying et al 2021;Zhang et al 2021).…”

Role of green financing and financial inclusion to develop the cleaner environment for macroeconomic stability: Inter-temporal analysis of ASEAN economies

“…The problem of the twenty-first century is climate change and global warming caused by greenhouse gases (Wu et al 2021 ). In Paris, 196 nations signed the Paris Agreement on Climate Change, which aims to keep global temperatures from rising more than 2 degrees Celsius each year to avoid the worst consequences of climate change in 2015 (Hoshen et al 2017 ).…”