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Green Finance and Decarbonization: Evidence from around the World

Author

Listed:
  • M. Al Mamun

    (La Trobe University [Melbourne])

  • S. Boubaker

    (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School)

  • D.K. Nguyen

    (IPAG Business School)

Abstract

This paper studies the effect of green finance on decarbonization. Using a large sample of 46 countries, we show that green finance significantly reduces carbon emissions in the short and long run. This effect is driven by green bonds issued to support waste and pollution control and improve energy efficiency. The impact of green finance on carbon emissions is more pronounced in developed credit markets and economies with higher innovation success and higher climate change exposure. Our results are robust under the conditions of short-run and long-run homogeneity and the cross-sectional dependence in the sample. \textcopyright 2022

Suggested Citation

  • M. Al Mamun & S. Boubaker & D.K. Nguyen, 2022. "Green Finance and Decarbonization: Evidence from around the World," Post-Print hal-04452662, HAL.
    • Handle: RePEc:hal:journl:hal-04452662
    DOI: 10.1016/j.frl.2022.102807
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    More about this item

    Keywords

    Carbon emissions; Credit and equity markets; Green bonds; Green finance; Innovation;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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