Can green finance and energy provide a Glimmer of hope towards sustainable environment in the midst of chaos? An evidence from Malaysia

Abstract

Sustainable development has many dimensions, such as clean energy, green growth, and sustainable industry. Green finance has a key role in realizing these targets. The core focus of the existing paper is to demystify the influences of green finance, green energy on environmental dynamics in Malaysia covering the timeframe from 1990 to 2018. To this end, we employ the QARDL technique to peruse the effect of green finance, renewable energy, and economic growth on CO2 emissions and ecological footprint separately. By doing so, we crosscheck the empirical outcomes and inspect the consistency of the analysis. Firstly, empirical results show that the ecological footprint model yields similar results to the CO2 emissions model in terms of statistically significant quantile ranges and the magnitude of the coefficients. According to the overall results, GDP increases environmental degradation while green finance and renewable energy have a mitigating role. Finally, we confirm a significant EKC hypothesis for Malaysia. Based on these findings, we recommend Malaysian policymakers focus on energy efficiency, realize financial reforms and promote green energy through the financial system to achieve the 2050 net-zero emission target.