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

Muhammad Sadiq,The-Truyen Trinh,Anh-Tuan Nguyen,Fengsheng Chien,Quang-Thanh Ngo,Xueying Wu

doi:10.1007/s11356-021-15023-w

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.

Highlights

The cleaner environment notion is still emerging, and it is much valuable in current policies and agendas
Endorsing the importance of BRI and E7 and G7 regions, recent study intends to estimate the antecedents of cleaner environment by using green financing techniques on long-run basis and provide the way forwards for policymakers to mitigate the climate change (Anh Tu et al 2021; Alemzero et al 2021)
Neutrality Growth Neutrality Feedback growth and neutrality Conversation Feedback Growth Feedback and growth Feedback, growth and neutrality Growth and feedback levels of carbon dioxide emission is in kilotons serving as a proxy measure of cleaner environment, gross domestic product (GDP) in US dollars (Vasylieva and Bilan 2019), the population in % and technical operation grants in US dollars, whereas the foreign direct investment (FDI) is measured in USD, human development index in %, renewable consumption as a proxy for green finance in kilotons, inflation in %, GDP in USD 2017 purchasing power parity (PPP), domestic investment private participation in the energy sector in USD while the local credit in dollars, specific for the private sector

Summary

Introduction

The cleaner environment notion is still emerging, and it is much valuable in current policies and agendas. Environ Sci Pollut Res another dimension following the mission to clean the environment of densely populated regions and projects (Alemzero et al 2020a). All these initiatives to clean the environment through climate change mitigation are inclined towards energy development and consumption sources, leading to a significant improvement in energy sectors in different regions and projects (Li et al 2021b). Endorsing the importance of BRI and E7 and G7 regions, recent study intends to estimate the antecedents of cleaner environment by using green financing techniques on long-run basis and provide the way forwards for policymakers to mitigate the climate change (Anh Tu et al 2021; Alemzero et al 2021)

Methods

Findings

Discussion

Conclusion