IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v56y2023i2d10.1007_s10644-022-09469-2.html
   My bibliography  Save this article

Assessing the impact of green energy and finance on environmental performance in China and Japan

Author

Listed:
  • Abdulrasheed Zakari

    (University of Wollongong
    Alma Mater Europaea ECM)

  • Bahareh Oryani

    (The State University of New York)

  • Rafael Alvarado

    (Universidad Espíritu Santo)

  • Kadir Mumini

    (Federal Polytechnic Ede)

Abstract

China and Japan have enjoyed significant economic boosts due to technological progress. However, these are accompanied by serious environmental pollution, which has brought China and Japan’s commitments to climate treaties into question. Therefore, this study attempts to contribute to the literature on green finance, energy, and the environmental sustainability nexus. We investigate the role of green finance and energy in the environmental performance of Asia (China and Japan) between 2010 and 2020. The empirical results show that green finance promotes environmental sustainability, suggesting that green finance reduces environmental pollution. Similarly, green energy positively affects environmental performance; this validates the theory that green energy technology is environmentally friendly. Therefore, we recommend promoting the green energy system through subsidies and grants.

Suggested Citation

  • Abdulrasheed Zakari & Bahareh Oryani & Rafael Alvarado & Kadir Mumini, 2023. "Assessing the impact of green energy and finance on environmental performance in China and Japan," Economic Change and Restructuring, Springer, vol. 56(2), pages 1185-1199, April.
    • Handle: RePEc:kap:ecopln:v:56:y:2023:i:2:d:10.1007_s10644-022-09469-2
    DOI: 10.1007/s10644-022-09469-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10644-022-09469-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10644-022-09469-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rongyan Liu & Deqing Wang & Li Zhang & Lihong Zhang, 2019. "Can green financial development promote regional ecological efficiency? A case study of China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 325-341, January.
    2. Michael A. Toman & Barbora Jemelkova, 2003. "Energy and Economic Development: An Assessment of the State of Knowledge," The Energy Journal, , vol. 24(4), pages 93-112, October.
    3. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 353-377.
    4. Charfeddine, Lanouar & Kahia, Montassar, 2019. "Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the MENA region: A panel vector autoregressive (PVAR) analysis," Renewable Energy, Elsevier, vol. 139(C), pages 198-213.
    5. Justin Caron & Thibault Fally, 2022. "Per Capita Income, Consumption Patterns, and CO2 Emissions," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(2), pages 235-271.
    6. Pauline Lacour & Catherine Figuière, 2014. "Environmentally-friendly technology transfers from Japan to China : an empirical analysis using patent data," Post-Print halshs-01066016, HAL.
    7. Vo, Duc Hong & Vo, Anh The & Ho, Chi Minh & Nguyen, Ha Minh, 2020. "The role of renewable energy, alternative and nuclear energy in mitigating carbon emissions in the CPTPP countries," Renewable Energy, Elsevier, vol. 161(C), pages 278-292.
    8. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    9. Tomiwa Sunday Adebayo & Dervis Kirikkaleli, 2021. "Impact of renewable energy consumption, globalization, and technological innovation on environmental degradation in Japan: application of wavelet tools," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 16057-16082, November.
    10. Pauline Lacour & Catherine Figuière, 2014. "Environmentally-friendly technology transfers from Japan to China: an empirical analysis using patent data," Journal of Innovation Economics, De Boeck Université, vol. 0(3), pages 145-169.
    11. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.),Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084, Central Bank of Chile.
    12. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    13. Lee, Chi-Chuan & Lee, Chien-Chiang, 2022. "How does green finance affect green total factor productivity? Evidence from China," Energy Economics, Elsevier, vol. 107(C).
    14. Xu, Yong & Li, Shanshan & Zhou, Xiaoxiao & Shahzad, Umer & Zhao, Xin, 2022. "How environmental regulations affect the development of green finance: Recent evidence from polluting firms in China," Renewable Energy, Elsevier, vol. 189(C), pages 917-926.
    15. Huang, Hongyun & Mbanyele, William & Wang, Fengrong & Song, Malin & Wang, Yuzhang, 2022. "Climbing the quality ladder of green innovation: Does green finance matter?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    16. Sadorsky, Perry, 2010. "The impact of financial development on energy consumption in emerging economies," Energy Policy, Elsevier, vol. 38(5), pages 2528-2535, May.
    17. Wenjie Zhang & Mingyong Hong & Juan Li & Fuhong Li, 2021. "An Examination of Green Credit Promoting Carbon Dioxide Emissions Reduction: A Provincial Panel Analysis of China," Sustainability, MDPI, vol. 13(13), pages 1-21, June.
    18. Muhammad, Bashir, 2019. "Energy consumption, CO2 emissions and economic growth in developed, emerging and Middle East and North Africa countries," Energy, Elsevier, vol. 179(C), pages 232-245.
    19. Farhad Taghizadeh-Hesary & Abdulrasheed Zakari & Rafael Alvarado & Vincent Tawiah, 2022. "The green bond market and its use for energy efficiency finance in Africa," China Finance Review International, Emerald Group Publishing Limited, vol. 12(2), pages 241-260, March.
    20. Omer, Abdeen Mustafa, 2008. "Green energies and the environment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(7), pages 1789-1821, September.
    21. Hanif, Imran & Faraz Raza, Syed Muhammad & Gago-de-Santos, Pilar & Abbas, Qaiser, 2019. "Fossil fuels, foreign direct investment, and economic growth have triggered CO2 emissions in emerging Asian economies: Some empirical evidence," Energy, Elsevier, vol. 171(C), pages 493-501.
    22. Dongdong Song & Haitian Pei & Yuewen Liu & Haiyong Wei & Shengfu Yang & Shougeng Hu, 2022. "Review on Legislative System of Photovoltaic Industry Development in China," Energies, MDPI, vol. 15(1), pages 1-15, January.
    23. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    24. Pata, Ugur Korkut & Caglar, Abdullah Emre, 2021. "Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: Evidence from augmented ARDL approach with a structural break," Energy, Elsevier, vol. 216(C).
    25. Festus Victor Bekun, 2022. "Mitigating Emissions in India: Accounting for the Role of Real Income, Renewable Energy Consumption and Investment in Energy," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 188-192.
    26. Jin, Yi & Gao, Xiaoyan & Wang, Min, 2021. "The financing efficiency of listed energy conservation and environmental protection firms: Evidence and implications for green finance in China," Energy Policy, Elsevier, vol. 153(C).
    27. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    28. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    29. Azilah Hasnisah & A. A. Azlina & Che Mohd Imran Che Taib, 2019. "The Impact of Renewable Energy Consumption on Carbon Dioxide Emissions: Empirical Evidence from Developing Countries in Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 135-143.
    30. Zameer, Hashim & Yasmeen, Humaira & Zafar, Muhammad Wasif & Waheed, Abdul & Sinha, Avik, 2020. "Analyzing the association between Innovation, Economic Growth, and Environment: Divulging the Importance of FDI and Trade Openness in India," MPRA Paper 101323, University Library of Munich, Germany, revised 2020.
    31. You, Wanhai & Zhang, Yue & Lee, Chien-Chiang, 2022. "The dynamic impact of economic growth and economic complexity on CO2 emissions: An advanced panel data estimation," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 112-128.
    32. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Huang, Anzhong & Bi, Qiuxiang & Dai, Luote & Ma, Yinghui, 2023. "Investigating the impact of financial development on the resource curse form its dual effect," Resources Policy, Elsevier, vol. 86(PA).
    2. Yao, Shun & Li, Tongxin & Li, Ying, 2023. "Promoting sustainable fossil fuels resources in BRICS countries: Evaluating green policies and driving renewable energy development," Resources Policy, Elsevier, vol. 85(PA).
    3. Yu, Zhichao & Youn, Ik Joong & Alessa, Noha & Borgi, Hela, 2023. "Does natural-resource-dependency create the need of green innovation?," Resources Policy, Elsevier, vol. 85(PA).
    4. Xu, Yuecheng & Shang, Yunfeng, 2023. "Emission taxation and sustainability in the mineral resources industry," Resources Policy, Elsevier, vol. 86(PB).
    5. Yin, Sidi & Liu, Xilong & Yang, Zitao & Xing, Haijing, 2024. "The impact of green education on resource extraction and consumption sustainability for green growth," Resources Policy, Elsevier, vol. 90(C).
    6. Li, Wenxue & Liu, Fei, 2023. "Financing green resource generation in sub-saharan Africa: Does financial integration matter?," Resources Policy, Elsevier, vol. 85(PB).
    7. Wei, Xiaolin & Shang, Yunfeng, 2023. "Modernization of governance at Chinese universities: Role of fossil fuels and green energy resource," Resources Policy, Elsevier, vol. 85(PB).
    8. Cai, Zheng & Qian, Long, 2023. "Scarcity of mineral resources and governance and development of renewable energy projects in China," Resources Policy, Elsevier, vol. 86(PB).
    9. Li, Zengrong & Wu, Yanqiu & Rasoulinezhad, Ehsan & Sheng, Yishen & Bi, Chunyu, 2023. "Green economic recovery in central Asia by utilizing natural resources," Resources Policy, Elsevier, vol. 83(C).
    10. Juan Wu, 2024. "Role of green finance and carbon accounting in achieving sustainability," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-7, December.
    11. Hu, Xiaofeng, 2023. "Green economic recovery in Central Asia by utilizing natural resources," Resources Policy, Elsevier, vol. 83(C).
    12. Zhang, Jianhua & Liu, Yushan & Zhang, Weihua & Ma, Xinyuan, 2023. "Role of green technologies in enhancing the efficiency of natural resources," Resources Policy, Elsevier, vol. 83(C).
    13. Chen Han & Lu Yang, 2024. "Financing and Management Strategies for Expanding Green Development Projects: A Case Study of Energy Corporation in China’s Renewable Energy Sector Using Machine Learning (ML) Modeling," Sustainability, MDPI, vol. 16(11), pages 1-33, May.
    14. Uche, Emmanuel & Das, Narasingha & Ngepah, Nicholas, 2024. "Green environments reimagined through the lens of green finance, green innovations, green taxation, and green energies. Wavelet quantile correlation and rolling window-based quantile causality perspec," Renewable Energy, Elsevier, vol. 228(C).
    15. Zhang, Ming & Li, Xiaoyan & Pai, Chih-Hung & Ding, Huanhuan & Zhang, Xuan, 2023. "Green credit and fossil fuel resource efficiency: Advancing sustainability in Asia," Resources Policy, Elsevier, vol. 86(PB).
    16. Liang, Benbo & He, Gailei & Wang, Yuran, 2024. "The digital economy, market integration and environmental gains," Global Finance Journal, Elsevier, vol. 60(C).
    17. Xiao, Nanbing & Zhou, Jincheng & Fang, Xia, 2023. "Role of digital finance, investment, and trade in technological progress," Global Finance Journal, Elsevier, vol. 57(C).
    18. Kaihua Wang, 2024. "Economic policy uncertainty and green finance: evidence from frequency and quantile aspects," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-26, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dinh Cong Hoang & Dinh Cong Tuan, 2023. "Evaluating the Role of Green Financing, International Trade and Alternative Energies on Environmental Performance in Case of Chinese Provinces: Application of Quantile Regression Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 500-508, March.
    2. George E. Halkos & Apostolos S. Tsirivis, 2023. "Electricity Production and Sustainable Development: The Role of Renewable Energy Sources and Specific Socioeconomic Factors," Energies, MDPI, vol. 16(2), pages 1-21, January.
    3. Tang, Chor Foon & Abosedra, Salah & Naghavi, Navaz, 2021. "Does the quality of institutions and education strengthen the quality of the environment? Evidence from a global perspective," Energy, Elsevier, vol. 218(C).
    4. Dieudonné Mignamissi & Eric Xaverie Possi Tebeng & Arnold Dilane Momou Tchinda, 2024. "Does trade openness increase CO2 emissions in Africa? A revaluation using the composite index of Squalli and Wilson," Environment Systems and Decisions, Springer, vol. 44(3), pages 645-673, September.
    5. Hassan, Mahmoud & Kouzez, Marc & Lee, Ji-Yong & Msolli, Badreddine & Rjiba, Hatem, 2024. "Does increasing environmental policy stringency enhance renewable energy consumption in OECD countries?," Energy Economics, Elsevier, vol. 129(C).
    6. Shushu Li & Jinglan Zhang & Yong Ma, 2015. "Financial Development, Environmental Quality and Economic Growth," Sustainability, MDPI, vol. 7(7), pages 1-22, July.
    7. Alessandro Federici & Pierluigi Montalbano, 2012. "Macroeconomic volatility, consumption behaviour and welfare: A cross-country analysis," Working Paper Series 3612, Department of Economics, University of Sussex Business School.
    8. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    9. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    10. Brown, James R. & Floros, Ioannis V., 2012. "Access to private equity and real firm activity: Evidence from PIPEs," Journal of Corporate Finance, Elsevier, vol. 18(1), pages 151-165.
    11. Singhania, Monica & Saini, Neha, 2021. "Demystifying pollution haven hypothesis: Role of FDI," Journal of Business Research, Elsevier, vol. 123(C), pages 516-528.
    12. John A. Jinapor & Shafic Suleman & Richard Stephens Cromwell, 2023. "Energy Consumption and Environmental Quality in Africa: Does Energy Efficiency Make Any Difference?," Sustainability, MDPI, vol. 15(3), pages 1-26, January.
    13. Dong-Hyeon Kim & Yi-Chen Wu & Shu-Chin Lin, 2022. "Carbon dioxide emissions, financial development and political institutions," Economic Change and Restructuring, Springer, vol. 55(2), pages 837-874, May.
    14. MBASSI, Christophe Martial & HYOBA, Suzanne Edwige Clarisse & SHAHBAZ, Muhammad, 2023. "Does monetary policy really matter for environmental protection? The case of inflation targeting," Research in Economics, Elsevier, vol. 77(3), pages 427-452.
    15. Wen, Jun & Yin, Hua-Tang & Jang, Chyi-Lu & Uchida, Hideaki & Chang, Chun-Ping, 2023. "Does corruption hurt green innovation? Yes – Global evidence from cross-validation," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    16. Kelly, Arsene Mouongue & Ngo Nguéda Radler, Romaine Doline, 2024. "Does energy consumption matter for climate change in Africa? New insights from panel data analysis," Innovation and Green Development, Elsevier, vol. 3(3).
    17. Khan, Syed Abdul Rehman & Zia-Ul-Haq, Hafiz Muhammad & Ponce, Pablo & Janjua, Laeeq, 2023. "Re-investigating the impact of non-renewable and renewable energy on environmental quality: A roadmap towards sustainable development," Resources Policy, Elsevier, vol. 81(C).
    18. Vighneswara Swamy & Munusamy Dharani, 2021. "Thresholds in finance–growth nexus: Evidence from G‐7 economies," Australian Economic Papers, Wiley Blackwell, vol. 60(1), pages 1-40, March.
    19. Gbolonyo, Emmanuel Y. & Ofori, Isaac K. & Ojong, Nathanael, 2024. "Does Economic Complexity Promote Inclusive Green Growth," EconStor Preprints 298785, ZBW - Leibniz Information Centre for Economics.
    20. Raffaella SANTOLINI, 2013. "Electoral rules and public expenditure composition: Evidence from Italian regions," Working Papers 396, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:56:y:2023:i:2:d:10.1007_s10644-022-09469-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.