Green environments reimagined through the lens of green finance, green innovations, green taxation, and green energies. Wavelet quantile correlation and rolling window-based quantile causality perspective

Abstract

Unarguably, a compromised environment portends negativities to humankind. Hence, we explored the potential of green finance, green innovations, green taxes, and green energy for green developments in South Africa (SA). Annual time-series data spanning 1996–2022 and cutting-edge estimators exposed the predictive effects of the under-listed variables on green environments. This includes the wavelet quantile correlation, time-varying Granger causality, and rolling window-based non-parametric quantile causality. The novel insights underscore the vital role of green finance in ensuring green growth, irrespective of some notable divergences over time. Likewise, green innovations, green taxes, and green energies produced notable environmental enhancing effects with underlining asymmetric effects across the time and quantiles of the distributions. The outcomes of the recursive evolving window algorithm and the rolling window-based quantile correlation portray that green finance, green innovations, green taxes, and green energies are significant positive enablers of green growth in SA. SA should forestall all the factors leading to the observed divergences as a policy option. This could be achieved through improved green finances and consistent promotion of all relevant green initiatives. These steps will aid the green revolution and enable the emergence of green development in the republic.