Do green finance, low‐carbon energy transition, and economic growth help in environmental investment?: Empirical evidence from emerging economies in Asia

Abstract

Environmentally friendly initiatives and green financing are needed to reduce pollution and transition to a low‐carbon energy system. This research was conducted to assess the efficacy of green bond financing for scaling up environmentally responsible investment in preparation for the low‐carbon energy transition in emerging Asian economies. The generalized method of moment's methodology is used to examine the impact of green finance, CO2 emission, and economic growth on the environmental investment of emerging nations over the period 2000–2021. The result showed that all these factors contribute significantly to environmental investment. In addition, the results showed that the burdens of global warming are achievable to alleviate through green bonds for the optimum transition to low‐carbon energy. Moreover, these economies have enacted measures to assist them in becoming green and encourage green initiatives, which function harmoniously with each other and have decreased carbon emissions, leading to the possible adaptation of green environmental investment sources. Hence, it is recommended that these economies boost their green financing activities, low‐carbon emissions, and economic development so that eco‐innovation and ecological investment can be made properly.

Green and Renewable Energy Financing Policy in Indonesia

“…Second, research on sustainable finance is also increasing as concerns about climate change and its potential impact on the economy and social welfare (Sharif et al, 2023). Third, socially and environmentally conscious investors plan to enter the green energy industry to build low-carbon portfolios (Belgacem et al, 2023). Fourth, investors and policymakers are interested in whether green energy stocks can hedge traditional and nontraditional asset classes (Barbier, 2022).…”

“…Energy demand is expected to continue increasing as oil and coal reserves decline. Additionally, the use of fossil fuels for energy results in excess carbon in the atmosphere, leading to global warming (Belgacem et al, 2023). Therefore, alternative energy supplies other than oil and coal are needed (Pan & Dong, 2023).…”

Renewable Energy: Policy and Strategy

“…Second, research on sustainable finance is also increasing as concerns about climate change and its potential impact on the economy and social welfare (Sharif et al, 2023). Third, socially and environmentally conscious investors plan to enter the green energy industry to build low-carbon portfolios (Belgacem et al, 2023). Fourth, investors and policymakers are interested in whether green energy stocks can hedge traditional and nontraditional asset classes (Barbier, 2022).…”

“…Energy demand is expected to continue increasing as oil and coal reserves decline. Additionally, the use of fossil fuels for energy results in excess carbon in the atmosphere, leading to global warming (Belgacem et al, 2023). Therefore, alternative energy supplies other than oil and coal are needed (Pan & Dong, 2023).…”

Nexus of geoenvironment, resource management and regional sustainable development: Introduction

“…The second factor that emerged from this special issue was financial policies (Belgacem et al, 2023) and stability (Kirikkaleli & Sofuo glu, 2023). Financial stability describes an economy able to withstand and recover from external shocks while growing steadily.…”