Volume 6 • Issue 1 • PP: 31–39 • 2026
Green Finance, Renewable Energy Adoption, and Carbon Emissions: Evidence from a Ten-Country Panel Dataset (2010–2022)
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© 2026 The Author(s). Published by ASPG. This article is licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0).
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The capital mobilisation needed to achieve the energy transition has put green finance on the agenda of climate policy discussions, but it is empirically unclear whether financial flows branded green translate into emissions abatement. Drawing on publicly available World Bank World Development Indicators and Climate Policy Initiative data for ten major economies over 2010–2022, this paper quantifies the relationships among green finance flows, renewable energy share, and per-capita CO2 emissions using pooled ordinary least squares regression, panel correlation analysis, and a cross-sectional multiple regression model. Renewable energy share is a strong negative predictor of per-capita emissions (r = −0.661; p < 0.001; βˆ = −0.1104), with each percentage-point increase in renewable penetration associated with a reduction of approximately 0.11 metric tons of CO2 per capita. A three-variable cross-sectional model combining renewable energy share, green finance, and GDP per capita accounts for 61% of cross-country variance in emissions in 2022 (R2 = 0.613). There is a positive and heterogeneous relationship between green finance flows and renewable adoption, which is most notable when the financial commitment is combined with strong regulatory frameworks. The country level trajectory analysis shows that all the ten economies have been on the rise in their renewable share between 2010 and 2022, but at a rate varying between 0.37 and 2.88 percentage points annually, and that the institutional environment is a moderating factor. The results have immediate implications on the design of green bond markets, the lending policy of multilateral development banks, and the structures of additionality that support net-zero transition schemes.
Keywords
References
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[3] C. Chen, M. Pinar, and T. Stengos, “Renewable energy consumption and CO2 emissions: New empirical evidence from the Union for the Mediterranean,” Sustainability, vol. 14, no. 11, art. no. 6921, 2022.
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[6] S. Fatica and R. Panzica, “Green bonds as a tool against climate change?” Business Strategy and the Environment, vol. 30, no. 5, pp. 2688–2701, 2021.
[7] International Energy Agency, CO2 Emissions in 2023. Paris, France: IEA, 2024.
[8] International Renewable Energy Agency, Renewable Power Generation Costs in 2022. Abu Dhabi, UAE: IRENA, 2023.
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[13] J. D. Sachs, W. T. Woo, N. Yoshino, and F. Taghizadeh- Hesary, “Importance of green finance for achieving sustainable development goals and energy security,” in Handbook of Green Finance: Energy Security and Sustainable Development, pp. 3–12, Springer, Singapore, 2019.
[14] F. Taghizadeh-Hesary and N. Yoshino, “Sustainable solutionsfor green financing and investment in renewable energy projects,” Energies, vol. 13, no. 4, art. no. 788, 2020.
[15] Task Force on Climate-related Financial Disclosures, Recommendations of the Task Force on Climate-related Financial Disclosures. Basel, Switzerland: Financial Stability Board, 2017.
[16] Q. Wang, F. Ren, and R. Li, “Assessing the impact of green finance on carbon emissions in China: A spatial econometric approach,” Journal of Environmental Management, vol. 327, art. no. 116896, 2023.
[17] World Bank, World Development Indicators 2023. Washington, DC: World Bank, 2023.
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