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Carbon Emissions and Clean Energy Investment: Global Evidence

Author

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  • Dan Zhang
  • Yunpeng Wang
  • Xinyu Peng

Abstract

Under the premise of the detrimental effects of carbon emission on the global climate, the role of governments in promoting clean energy investment has become more important, and monetary policy as one government tool has drawn greater attention among the public. Our research successfully develops a new model that links clean energy investments with monetary policies and carbon emissions in 9 Asian economies spanning the period from 1996 to 2018. First, from the results of cointegration tests, we find a long-term relationship among the variables. Second, using FMOLS estimators, our paper reveals that expansionary monetary policy promotes clean energy investment and that its effect is stronger in developing countries. Third, we find a positive relationship between CO2 emissions and clean energy investment in the full sample but the relationship becomes negative in developing countries. Accordingly, the paper offers suggestions on possible policy initiatives to improve clean energy investment.

Suggested Citation

  • Dan Zhang & Yunpeng Wang & Xinyu Peng, 2023. "Carbon Emissions and Clean Energy Investment: Global Evidence," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(2), pages 312-323, January.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:2:p:312-323
    DOI: 10.1080/1540496X.2022.2099270
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    Cited by:

    1. Chen, Shiu-Sheng & Lin, Tzu-Yu, 2024. "Monetary policy and renewable energy production," Energy Economics, Elsevier, vol. 132(C).
    2. Iulia Lupu & Adina Criste & Tudor Ciumara & Camelia Milea & Radu Lupu, 2024. "Addressing the Renewable Energy Challenges through the Lens of Monetary Policy—Insights from the Literature," Energies, MDPI, vol. 17(19), pages 1-31, September.

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