Nexus between green finance, renewable energy, and carbon intensity in selected Asian countries

Abstract

Long-term economic growth is dependent on the state of the energy sector in every given country. While green finance is gaining popularity due to its positive role in providing financial capital and funds for environmentally friendly ventures on a priority basis. Therefore, green finance and renewable energy technologies can play a crucial role in reducing carbon intensity. Hence, the study's primary objective is to estimate the impact of green finance and renewable energy on carbon intensity in 10 Asian economies. This study has applied the panel quantile autoregressive distributed lag (QARDL) model to get the short and long-run estimates across several quantiles. The short and long-run estimates of green finance are a negatively significant impact on carbon intensity at all quantiles. The estimates of renewable energy consumption is a negatively significant impact on carbon intensity in only the long run at all quantiles. These results confirm that green finance and renewable energy consumption help reduce the carbon intensity in Asian economies. Moreover, the asymmetric impact of green finance and renewable energy consumption on carbon intensity is confirmed in the short and long run. The study provides various important policy suggestions that help in carbon neutrality targets.