Impact of Green Finance on Environmentally Sustainable Development Goals DOI: https://doi.org/10.33093/ijomfa.2026.7.2.10
Article Sidebar
Main Article Content
Abstract
In this context, climate change represents a real phenomenon with significant implications for economies, industries, and societies worldwide. In the context of the Regional Comprehensive Economic Partnership (RCEP) agreement, these implications are significant, given that the countries in question cumulatively account for a considerable share of global emissions, energy consumption, and industrial production. As these countries aim for a carbon-neutral future and continue the path toward the achievement of the Sustainable Development Goals (SDGs) set for 2030, the question for these countries, therefore, is not whether they should act but how they can act in a sustainable manner toward a cleaner future for themselves and for the world. In this context, this study seeks to understand the determinants that can help these countries achieve a sustainable future for themselves and the world at large. In this context, the role of green finance, research and development expenditure, renewable energy, energy efficiency, and green technology innovation in the context of carbon emissions and the achievement of SDG 7, 8, 9, 12, and 13 from 2016 to 2023 will be specifically analysed, keeping in mind the established theories of economics and environment, which suggest that economic growth can be a pressure on the environment, and innovation and financial systems can be a solution for these problems as well.
Article Details
References
Almeida, D., Carvalho, L., Ferreira, P., Dionísio, A., & Haq, I. U. (2024). Global dynamics of environmental kuznets curve: a cross-correlation analysis of income and CO2 emissions. Sustainability, 16(20), 9089. https://doi.org/10.3390/su16209089
Alvi, S., Ahmad, I., Nawaz, S. N., Cornell, W., Anser, M. K., & Hassan, M. U. (2025). The role of green finance, energy transition, and digitalization in OECD green house gas emissions. Journal of Cleaner Production, 145865. https://doi.org/10.1016/j.jclepro.2025.145865
Amin, N., Sharif, A., Shabbir, M. S., & Pan, Y. (2025). Evaluating the impact of natural resource rents, R&D expenditures, green finance and energy efficiency on carbon emissions in brics economies: Greening the path to carbon neutrality in the post-COP 27 era. Technology in Society, 102826. https://doi.org/10.1016/j.techsoc.2025.102826
Asian Transport Observatory, (2024) Alarming rise in Asia-Pacific Transport Emissions. https://asiantransportobservatory.org/insights/cop29-primer-insight-1/
Bai, J., Han, Z., Rizvi, S. K. A., & Naqvi, B. (2023). Green trade or green technology? The way forward for G-7 economies to achieve COP 26 targets while making competing policy choices. Technological Forecasting and Social Change, 191, 122477. https://doi.org/10.1016/j.techfore.2023.122477
Cao, W., Zhang, X., & Iqbal, K. (2025). Using green finance to study energy elasticity, coal subsidy, energy transition and energy dependence in E7 economies: an efficiency analysis with data envelopment analysis. Energy Strategy Reviews, 60, 101794. https://doi.org/10.1016/j.esr.2025.101794
Chen, Y., & Lubabu, M. M. (2025). Investigating the Interrelationship among Renewable Energy Consumption, Green Finance, Agriculture, Green Technology, Industry, and Urbanization on CO2 Emissions: Evidence from BRICS-M-A Countries. Renewable Energy, 124052. https://doi.org/10.1016/j.renene.2025.124052
Chi, Y., Iqbal, S., Zhang, M., Zhang, X., Saeed, M. Y., & Farhan, M. (2025). Nonlinear dynamics and threshold effects of green finance on carbon emissions: A complex systems analysis in the Asia-Pacific region. Chaos Solitons & Fractals, 200, 116949. https://doi.org/10.1016/j.chaos.2025.116949
ESCAP (2024). A review of climate ambition in Asia and the Pacific: From ambitions to results Sectoral Solutions and integrated action https://www.unescap.org/kp/2024/climate-ambition-asia-pacific
Fan, M., Liu, W., & Yao, D. (2025). The impact of green finance reform and innovation pilot zones on corporate pollution and carbon reduction: From the perspective of dual objective constraints. Journal of Environmental Management, 389, 126110. https://doi.org/10.1016/j.jenvman.2025.126110
Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. The Quarterly Journal of Economics, 110(2), 353–377. https://doi.org/10.2307/2118443
Hua, Y., & Tong, T. (2025). Renewable energy integration in the belt and road initiative: government expenditure, green finance, and economic growth. Renewable Energy, 123980. https://doi.org/10.1016/j.renene.2025.123980
IEA (2024), Energy Efficiency 2024, IEA, Paris https://www.iea.org/reports/energy-efficiency-2024
IEA (2024), Renewables 2024, IEA, Paris https://www.iea.org/reports/renewables-2024, Licence: CC BY 4.0
IEA (2025), Global Energy Review 2025, IEA, Paris https://www.iea.org/reports/global-energy-review-2025
IEA (2025), The State of Energy Innovation 2025, IEA, Paris https://www.iea.org/reports/the-state-of-energy-innovation
Jawadi, F., Pondie, T. M., & Cheffou, A. I. (2024). New challenges for green finance and sustainable industrialization in developing countries: A panel data analysis. Energy Economics, 108120. https://doi.org/10.1016/j.eneco.2024.108120
Khan, M. A., Xinye, T., Sohag, K., Ameer, W., & Alkhaldi, M. S. (2025). Does green innovation mitigate CO2 emission, transport emission and carbon intensity in Asian developing economies? The Science of the Total Environment, 997, 180134. https://doi.org/10.1016/j.scitotenv.2025.180134
Khan, S., Akbar, A., Nasim, I., Hedvicakova, M., & Bashir, F. (2022). Green finance development and environmental sustainability: A panel data analysis. Frontiers in Environmental Science, 10. https://doi.org/10.3389/fenvs.2022.1039705
Li, K., Wu, Z., Huang, L., Zhong, Z., & Shi, W. (2025). Spatial insights into green finance development and energy efficiency in China. Environment Development and Sustainability. https://doi.org/10.1007/s10668-025-06279-0
Liao, C. (2025). Does Fintech improve green innovation efficiency in China? Insight from R&D activities, green finance, and government environmental awareness. The Quarterly Review of Economics and Finance, 102035. https://doi.org/10.1016/j.qref.2025.102035
Liu, Y. (2025). Whether fintech, natural resources, green finance and environmental tax affect CO2 emissions in China? A step towards green initiatives. Energy, 320, 135181. https://doi.org/10.1016/j.energy.2025.13518ruana
Liza, F. F., Wei, L., Hassan, S. T., Khan, I., & Ahmad, F. (2024). Driving low-carbon mechanisms through smart investments in renewable resources and green finance initiatives among G20 nations. Journal of Environmental Management, 370, 122439. https://doi.org/10.1016/j.jenvman.2024.122439
Mehroush, I., Shaheen, W. A., Shabir, M., & Talha, M. (2024). Pathways to ecological resilience: exploring green energy and finance for sustainable development. Environment Development and Sustainability. https://doi.org/10.1007/s10668-024-04662-x
Mohsin, M., & Jamaani, F. (2023). Unfolding impact of natural resources, economic growth, and energy nexus on the sustainable environment: Guidelines for green finance goals in 10 Asian countries. Resources Policy, 86, 104238. https://doi.org/10.1016/j.resourpol.2023.104238
Ouni, M., Mrad, S., & Mraihi, R. (2025). Pathways to sustainable transportation in G-20 countries: Unveiling the role of green technology, green energy, green finance and digital economy using panel data and machine learning analyses. Research in Transportation Business & Management, 60, 101355. https://doi.org/10.1016/j.rtbm.2025.101355
Pigou, A. C. (1952). The economics of welfare. Online Library of Liberty. https://oll.libertyfund.org/titles/pigou-the-economics-of-welfare
Porter, M. E., & Van Der Linde, C. (1995). Toward a new conception of the Environment-Competitiveness relationship. The Journal of Economic Perspectives, 9(4), 97–118. https://doi.org/10.1257/jep.9.4.97
Praveen, B., Rath, B. N., & Akram, V. (2025). A new way of thinking about the nexus between green energy and green economic growth: The mediating role of green finance and green technology. Journal of Environmental Management, 390, 126235. https://doi.org/10.1016/j.jenvman.2025.126235
Regional Comprehensive Economic Partnership (RCEP). ASEAN Main Portal. (2024, October 28). https://asean.org/our-communities/economic-community/integration-with-global-economy/regional-comprehensive-economic-partnership-rcep/
Ruan, Y., Wang, W., Abubakar, M., & Ahmad, N. (2025). Global economic resilience: developing green growth strategies, renewable energy integration, and environmental economics for sustainability. Renewable Energy, 123341. https://doi.org/10.1016/j.renene.2025.123341
Shi, X., & Shi, D. (2025). Impact of green finance on renewable energy technology innovation: empirical evidence from China. Sustainability, 17(5), 2201. https://doi.org/10.3390/su17052201
Sun, Y., Li, T., & Mehmood, U. (2024). Balancing acts: Assessing the roles of renewable energy, economic complexity, Fintech, green finance, green growth, and economic performance in G-20 countries amidst sustainability efforts. Applied Energy, 378, 124846. https://doi.org/10.1016/j.apenergy.2024.124846
United Nations. (2025). The 17 goals | Sustainable development. https://sdgs.un.org/goals
Wang, Y., & Xu, A. (2023). Green investments and development of renewable energy projects: Evidence from 15 RCEP member countries. Renewable Energy, 211, 1045–1050. https://doi.org/10.1016/j.renene.2023.05.034
Wang, Y., Shi, M., Zhao, Z., Liu, J., & Zhang, S. (2024). How does green finance improve the total factor energy efficiency? Capturing the mediating role of green management innovation and embodied technological progress. Energy Economics, 108157. https://doi.org/10.1016/j.eneco.2024.108157
Wu, G., Liu, X., & Cai, Y. (2023). The impact of green finance on carbon emission efficiency. Heliyon, 10(1), e23803. https://doi.org/10.1016/j.heliyon.2023.e23803
Xu, X., Tan, L., & Zhao, J. (2025). Sustainable finance and renewable energy investment as dual drivers of economic growth and environmental sustainability in the European Union. Research in Economics, 101065. https://doi.org/10.1016/j.rie.2025.101065
Yang, B., & Liu, Y. (2025). Green finance reform, environmental regulation, and regional Green and Low-Carbon development. Finance Research Letters, 108104. https://doi.org/10.1016/j.frl.2025.108104
Yao, D., Zhang, Y., Hu, J., & Zhou, H. (2025). Effect of green inclusive finance on carbon emission efficiency: Empirical evidence from provincial panel data in China. International Review of Financial Analysis, 104486. https://doi.org/10.1016/j.irfa.2025.104486
Yeboah, K. E., Feng, B., Jamatutu, S. A., Nyarko, F. E., & Charles, A. (2025). Impact of green financing on energy efficiency and CO2 emissions in Africa: The role of environmental tax and FDI. Journal of Cleaner Production, 521, 146258. https://doi.org/10.1016/j.jclepro.2025.146258
Zhang, D., Mohsin, M., & Taghizadeh-Hesary, F. (2022). Does green finance counteract the climate change mitigation: Asymmetric effect of renewable energy investment and R&D. Energy Economics, 113, 106183. https://doi.org/10.1016/j.eneco.2022.106183
Zhang, Y., Gao, K., Wang, T., Chi, S., Cui, K., & Wen, C. (2025). The development, regional differences, and dynamic evolution of China’s green finance in the context of “Carbon Peaking and Carbon Neutrality.” International Review of Economics & Finance, 104100. https://doi.org/10.1016/j.iref.2025.104100
Zhao, X., Zeng, B., Zhao, X., Zeng, S., & Jiang, S. (2024). Impact of green finance on green energy efficiency: A pathway to sustainable development in China. Journal of Cleaner Production, 450, 141943. https://doi.org/10.1016/j.jclepro.2024.141943