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Green finance and energy transition to achieve net-zero emission target

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  • Zhang, Dongyang
  • Guo, Yumei
  • Taghizadeh-Hesary, Farhad

Abstract

This study measured the effects of green financing and energy transition on COP26 targets for 40 countries, namely, 14 economies with market-based financial systems and 26 countries with bank-based financial systems, from 2010 to 2020. The findings confirmed that, in the market-based financial system, GDP per capita has a positive coefficient, while for countries with a bank-based financial system, GDP per capita has a negative coefficient on greenhouse gas emissions. With a 1% improvement in the energy transition of countries under a market-based financial structure, greenhouse gas emissions will decrease by 0.08%. The central practical policies recommended by this research are enhancing green loans, bank financing, and green bank guarantees.

Suggested Citation

  • Zhang, Dongyang & Guo, Yumei & Taghizadeh-Hesary, Farhad, 2023. "Green finance and energy transition to achieve net-zero emission target," Energy Economics, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323004346
    DOI: 10.1016/j.eneco.2023.106936
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    More about this item

    Keywords

    COP26; Energy transition; Green financing; Fully modified OLS; GHGs emissions;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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