Analyzing the green financing and energy efficiency relationship in ASEAN

Abstract

PurposeThe need to improve energy efficiency as an essential factor for achieving the Sustainable Development Goals (SDGs) through green financing is one of the most important issues worldwide. It is even more important for ASEAN (Association of Southeast Asian Nations) countries because of their potential for economic growth and the challenge of their environmental problems. This paper therefore addresses the question of whether and how green finance (with the proxy of issued green bonds [GBs]) promotes energy efficiency (with the proxy of energy intensity) in the ASEAN member countries.Design/methodology/approachThe paper runs a two-stage generalized method of moments (GMM) system model for the quarterly data over the period 2017–2020. It also uses a linear interaction model to explore how the pandemic may affect the relationship between green finance and energy efficiency in this region.FindingsThe main results only demonstrate the short-term negative impact of GBs on energy intensity. Furthermore, per capita income, economic integration and renewable energy supply can be used as potential variables to reduce energy intensity, while modernization in ASEAN increases energy intensity. Establishment of digital green finance, long-term planning of a green finance market, trade liberalization and policies to mitigate the negative impacts of COVID-19 are recommended as golden policy implications.Research limitations/implicationsThe present study has several limitations. First, it accounts for explanatory variables by following a number of previous studies. This may lead to omissions or errors. Second, the empirical estimates were conducted for 160 observations due to the repositioning of GBs in ASEAN, which is not bad but not good for an empirical study.Originality/valueTo the best of authors' knowledge, there has not been any in-depth study focusing on the relationship between energy efficiency and green financing for the case of ASEAN economies.

The Economic Development of Asian Countries With Achievement of SDG 8: A Systematic Literature Review

“…ASEAN states that ASEAN is a region rich in mineral resources, and because of this, ASEAN is the one that supports Asia's largest economy. In developing countries, economic growth is still challenging to achieve, considering that the lack of adequate infrastructure makes developing countries' regions sometimes lag compared to developed countries (Quang & Thao, 2022). In addition, in achieving the goals of economic development, many factors cause the process of economic growth.…”

Dynamic connectedness amongst green bonds, pollution allowance policy, social responsibility and uncertainty

“…This dynamic can be understood within the broader context of climate change and its associated risks and opportunities (e.g. Phung and Doan Phuong, 2022;Maier et al, 2016;Teece et al, 2016). In this context, investing in climate-initiative assets can be prejudiced through uncertainties in several Dynamic connectedness amongst green bonds ways, including policy uncertainties, where changes in government policies and regulations can significantly impact the attractiveness of climate-initiative investment tools.…”

“…This dynamic can be understood within the broader context of climate change and its associated risks and opportunities (e.g. Phung and Doan Phuong, 2022; Maier et al. , 2016; Teece et al.…”

Assessment of environmental tax and green bonds impacts on energy efficiency in the European Union

“…Regarding green bonds, Devine and McCollum ( 2022 ) expressed that green bonds can provide sufficient capital for countries to develop green energy projects and promote technologies to improve energy efficiency. In another study, Quang and Thao ( 2022 ) focused on the ASEAN member countries and found that the issued green bonds can reduce energy intensity (energy usage/GDP). This finding has been confirmed by Mamun et al ( 2022 ), who also studied the relationship between green finance and the decarbonization process in 46 different nations.…”