Role of green financing and stability in the development of green resources in China

Abstract

This study assesses the impact of green finance, inflation, and geopolitical factor on green resource development using China's micro and macroeconomic data between 2009 and 2019 using Pooled Ordinary Least Square (OLS) regression model. The results show that environmental policies and green finance instruments can affect green resource performance significantly and positively, especially the environmental taxes related to carbon dioxide emissions. These taxes implementation have a generally favorable effect on profitability in renewable resources. Conversely, changes in oil prices and regional uncertainties have harmful pressure on investments in renewable energy sources in China. The study provides practical policy recommendations for achieving a sustainable economy and green recovery. The major policy implications are promoting green finance, especially the issuance of green bonds and, simultaneously, carbon taxation.