BÀI TẬP KIỂM TOÁN TÀI CHÍNH QUỐC TẾ

Renewable Energy 211 (2023) 279–284
Contents lists available at ScienceDirect Renewable Energy
journal homepage: www.elsevier.com/locate/renene
Green finance, renewable energy and carbon neutrality in OECD countries
Cheng Jin a,*, Zhiwei Lv b, Zengrong Li c, Kehan Sun d
a Shaoxing University, School of Business, China
b Shaoxing University, School of Foreign Languages, China
c Zhejiang Yuexiu University, School of Digital Commerce, China
d Hosei University, IGESS, Faculty of Economics, Japan A R T I C L E I N F O A B S T R A C T JEL classification:
Many countries have committed to reducing carbon emissions based on an international roadmap entitled C27
“carbon neutrality.” This study empirically investigates the effects of green finance and renewable energy sources Q56
on 38 OECD member states’ carbon neutrality target covering period from 2013 to 2021. According to the O31
estimated findings, increasing the issued green bonds in OECD would bring about more achievements in the Keywords:
carbon neutrality target. In particular, A rise in green energy consumption of 1% is expected to result in an Green finance
improvement of nearly 0.048% towards the carbon neutrality goal. Moreover, uncertainty has a negative impacts Renewable energy deployment Carbon neutrality
on the carbon neutrality of OECD with the most significant magnitude of coefficient among other explanatory Green innovation
variables. The primary policy implications are developing the green financial market, digital green financing
tools, and sustainable power generation through three phases of locating, investing, and utilizing carbon market policy. 1. Introduction
reforms, and green innovation investment. Currently, Japan is consid-
ered one of the essential emitters of greenhouse gases globally (nearly
Many experts have considered climate change the biggest threat to
1150 MtCO2 in 2021) and is highly dependent on fossil fuel consump-
human life in the current century [1,2]. Climate change, which has been
tion (imported crude into the country, nearly 2.5 million barrels a day in
continuously occurring due to the non-compliance of environmental
2021), and the consumption of fossil fuels will have a negative impact on
issues, the significant growth of industrialization, and the increase in
the sustainable development of the country [45]. During Dubai’s Expo
population, has caused challenges such as melting polar ice, global
2020, the UAE declared its aim to achieve carbon neutrality by 2050 by
warming, drought and severe floods, and deforestation. Many countries
boosting the proportion of renewable energy sources in the country’s
have committed to reducing carbon emissions based on an international
energy consumption mix. In 2021, Jair Bolsonaro (President of Brazil)
roadmap (such as the Paris Agreement of 2015 or the COP 26 (the 2021
declared his country’s commitment to carbon neutrality by 2050. This
United Nations Climate Change Conference in Glasgow) targets of 2021)
target would be based on developing hydropower and other renewable
or separately. The term “carbon neutrality,” meaning a balance between
energy resources. As a giant populated and polluted country, India has
absorbing carbon and emitting carbon, is one of the critical goals of the
constructed the 2040 target of carbon neutrality and the 2070 net zero
commitment of countries through the use of policies and tools for the
vision [4]. Countries have come to believe that with a commitment to
development of green energy consumption, green technologies,
the international space, they can achieve a carbon-neutral vision based
reducing energy intensity and increasing energy efficiency has attracted
on their capacities and infrastructure [5]. believe that carbon neutrality
the attention of policymakers [3]. address the carbon neutrality term as
plans are more than just a simple one-way duty. They provide produc-
the situation in which the total output of CO2 during production is zero.
tivity, growth, and innovation for countries’ economic sectors.
A group of countries has prepared and announced the carbon
OECD (Organization for Economic Cooperation and Development)
neutrality vision. For example, the Japanese administration declared in
includes a group of economies with industrialized and developed char-
October 2020 that the country would reach the carbon-neutrality target
acters. OECD countries emitted carbon dioxide around 10.3 metric tons
by 2050 through three successful wings of structural change, industrial
per capita in 1990 and declined to 8.5 metric tons per capita in 2019. * Corresponding author.
E-mail addresses: jincheng@usx.edu.cn (C. Jin), 5636148@qq.com (Z. Lv), 20201112@zyufl.edu.cn (Z. Li), ke1anz1001@gmail.com (K. Sun).
https://doi.org/10.1016/j.renene.2023.04.105
Received 22 January 2023; Received in revised form 3 April 2023; Accepted 22 April 2023 Available online 29 April 2023
0960-1481/© 2023 Elsevier Ltd. All rights reserved. C. Jin et Renewable Energy 211 al. (2023) 279–284
Part of this decrease in carbon dioxide emissions from 1990 to 2019 is
(CNT). A rise in green energy consumption of 1% is expected to result in
leaded by the implementation of the countries’ environmental policies
an improvement of nearly 0.048% towards the carbon neutrality goal.
[6]. This decrease is also due to the economic recession caused by the
Moreover, uncertainty has a negative impacts on the carbon neutrality
financial crisis of 2008–2009 [7] and the outbreak of the Corona disease
of OECD with the most significant magnitude of coefficient among other
in 2019. In addition, the top OECD economic sectors that generated GHG
explanatory variables. The primary policy implications are developing
emissions are energy industries, transport, manufacturing industries,
the green financial market, digital green financing tools(GFT), and
agriculture, and industrial processes [6]. express that OECD countries
sustainable power generation through three phases of locating, invest-
have monitored the origins of GHG(greenhouse gas) emissions in the
ing, and utilizing carbon market policy.
economy and are trying to find efficient solutions to lower carbon
The paper in continue is organized as follows. Section Literature
emissions and achieve the goal of net-zero carbon emissions in the
review: expresses the related literature, clarifies their gaps that this
future. Generally, the member countries of OECD have sought to pioneer
study is to fill in. Section Data, theory and emprical model: provides a
in planning, implementing, and developing reduction policies in carbon
data description, theoretical background, and model specification.
emissions. OECD Green Growth Strategy came into operation in May
Section empirical results: discuss the empirical findings. Section Dis-
2011, which was the severe initial commitment of the OECD to achieve
cussions: discusses the effects of uncertainty on the correlation between
green GDP growth. In addition, The OECD International Programme for
carbon neutrality and explanatory variables among OECD nations.
Action on Climate (IPAC) is another part of the OECD heading the
Section Conclusions: concludes the research by providing policies im-
operational plan towards realizing net-zero greenhouse gas emissions in
plications and insights on future research.
member countries by 2050. IPAC supports the Paris Agreement and
UNFCCC (The United Nations Framework Convention on Climate 2. Literature review
Change) monitoring frameworks, enhancing OECD members’ abilities
and potential to promote unified green policies, determine the best
Numerous literatures highlighted the importance of carbon
practices in countries, and provide feedback on OECD members’ green
neutrality as a vital priority in OECD member countries [16]. addressed activities.
the carbon neutrality target to combat global warming in OECD member
The objective of attaining carbon neutrality in 2050 in OECD
states. However, the target requires green innovation and good gover-
member countries should be monitored, planned, and promoted ac-
nance. Another study [17] explored the linkage between eco-innovation
cording to the assets and infrastructure of each member country. For
and greenhouse gas emissions in OECD from 2011 to 2018. They
example, according to the OECD Environmental Performance Reviews
revealed that sustainable innovation could provide new green processes
[8], Denmark has the lowest carbon intensity, the highest share of green
and technology to promote decarbonization policy in these economies
taxation in GDP, and a high rate of eco-innovation among OECD coun-
[18]. studied the aspects of carbon neutrality in major exporting coun-
tries. Furthermore, Germany has arranged a plan to boost green power
tries of OECD. The significant results confirmed that digital technology
generation from 17% in 2020 to approximately 80% in 2050. The USA
and per capita energy usage are two major factors influencing carbon
(as one of the leaders in green technology) has set the 2030 greenhouse
neutrality targets [19]. focused on 16 high-income economies of the
gas pollution 50–52% reduction target to enhance environmental se-
OECD states from 1990 to 2020. They concluded that energy efficiency
curity in the country. Finland has set up roadmap, in the form of a
plays a core role in decarbonization policies in these economies [20].
long-term low greenhouse gas (GHG) emission development strategy
investigated the goal of carbon emissions reduction in 30 OECD coun-
(LEDS), to achieve carbon neutrality by 2035. Sweden is trying to make
tries from 1960 to 2018. They found that reduction in CO2 emissions is a
100% green power generation by 2040 based on its 2030 target for
function of different variables and makes it hard for policy imple-
greenhouse gas emissions. Reaching these targets needs efficient in-
mentations to reach carbon neutrality [21]. focused on the case of the struments and policies.
Netherlands as a member of the OECD and sought to explore a suitable
The lack of available capital is one of the primary obstacles to pro-
policy package for a climate-neutral industry in the country. The sig-
moting green projects. According to a group of earlier studies (e.g. Refs.
nificant results depicted the crucial roles of technological progress,
[9–11]), since environmentally friendly projects are often slow and
green social awareness, and setting transparent regulations for estab-
low-yielding, the private sector and even governments are unwilling to
lishing a climate-neutral industry.
invest in such projects. Therefore, using tools to make environmental
Another group of studies has concentrated on the influence of green
projects attractive (reducing investment risk, providing investment
finance in advancing the implementation of renewable energy in OECD
guarantees, increasing investment efficiency) should be used in coun-
states. Generally, the favorable role of GFT in developing green energy
tries. One of the essential methods in recent decades has been the uti-
utilization has been confirmed by many studies [42–44]. As stated by
lization of financial tools that are dedicated to supporting
Ref. [13], green finance may increase investment in green projects,
environmentally sustainable projects, such as green bonds. Globally, the
leading to an increased rate of green economic expansion within the
green finance size was nearly 3650 billion US dollars in 2021 and is
OECD states [46]. found that issuing green bonds can promote the
predicted to be accelerated to about 22480 billion US dollars in 2031
deployment of green energy in China’s tourism industry [22].examined
[12]. Regarding the OECD member countries [13], declare that the
yearly data overing 2010–2020 for the OECD states and suggested that
countries have a significant potential to boost the efficiency of green
there exists a bi-directional linkage between green finance and green
financial markets [14]. address green finance as a vehicle of financial
growth. Furthermore, green finance facilitates the process of investment
inclusion in OECD members leading to promoting green projects.
in green projects [23]. investigated green finance in Germany. They
This paper aims to explore the impacts of green finance and the
concluded that market uncertainty and government support impact the
adoption of renewable energy on the OECD member states’ carbon
green finance market. Another study [24] explored the characteristics of
neutrality. To this end, this research makes contributions to current
green bonds in the USA and Europe. The noteworthy findings validated
studies in mainly two aspects: one is devising the new Carbon neutral
the beneficial role of green bonds in enhancing investment returns and
capacity index, proposed by Ref. [15], for the OECD members and to use
decreasing market instability.
in the empirical model as the dependent variable. The other is that,
The above-mentioned earlier studies show that no in-depth study has
among the explanatory variables this paper analyzes the impact of un-
yet to focus on the effects of green finance and sustainable energy on
certainty on carbon neutrality for a further discussion.
achieving carbon neutrality targets in OECD member countries. In this
According to the estimated findings by the system GMM (General-
paper, the new Carbon neutral capacity index, proposed by Ref. [15], is
ized Moment Method), increasing the issued green bonds in OECD
calculated for the OECD members and considered as the dependent
would bring about more achievements in the carbon neutrality target
variable. The green bond that has been issued is used as a measure of 280 C. Jin et Renewable Energy 211 al. (2023) 279–284
green finance and renewable energy consumption is selected as
3.3. Model specification explanatory variables.
The first point to model the empirical relationship between variables
3. Data, theory and emprical model
is that carbon neutrality may be affected by earlier environmental per-
formance [30]. Therefore, the first lag of the dependent variable needs
3.1. Theoretical baseline
to be added to the right side of the equation. In order to explore the
dynamic relationship between variables, the system GMM (Generalized
Green financial instruments may impact carbon neutrality through
Moment Method) estimation is employed, which has various advantages
two main transmission channels. The first one is the channel of funding
(e.g., robustness to heteroscedasticity). The econometric equation based
sustainable projects that directly reduce carbon emissions and can in-
on the system GMM is as follows:
crease energy efficiency. According to a group of earlier studies (e.g. ′
Refs. [9–11]), since environmentally friendly projects are often slow and
CNit = α1CNi,t− 1 + α2GBit + α3RECit + β Xit + μ + u i t + εit (1)
low-yielding, the private sector and even governments are unwilling to
invest in such projects. Therefore, appropriate tools to make environ-
Here, CN represents carbon neutrality, while GB and REC as major
mental projects attractive (such as reducing investment risk, providing
explanatory variables, are issued green bonds and renewable energy
investment guarantees, increasing investment efficiency) should be used
consumption, respectively. X denotes control variables, namely the
in countries [25]. expressed that green transition that may lower carbon
Green economy innovation index, GDP per capita, and good governance.
emissions may be promoted by green financial policy [26]. declared that
The subscript i and t in the variables denote year and state, respectively. green finance In addition, u
’s positive impact on the decarbonization target is through
t and μi are the fixed effects of time and state.
green funding projects [27]. revealed that green finance can lead the
investment flows toward environment-friendly projects by increasing 4. Empirical results
the appeal of these projects to investors. Therefore, green finance may
solve the financing constraint in green projects leading to faster growth
The estimation findings of the GMM system technique for 38 OECD
of decarbonization progress in a country. Conversely, green financing
countries over 2013–2021 are organized in Table 2.
tools may surge the rate of green technology innovation [22]. high-
According to Table 2, the lagged value of carbon neutrality shows a
lighted the effects of green finance instruments on green innovation in
positive effect and statistically significance at 1% level on the value of
developed countries [28]. mentioned that green financial instruments
the variable. Therefore, improving the situation of carbon emission
upgrade green innovation by promoting green R
reduction in the OECD countries will improve carbon neutrality in the &D, industrial structure
changes, and financing green patents.
future. This finding is in line with [30,31], which confirmed the impacts
Considering the two transmission channels, carbon neutrality can be
of the lagged value of environmental issues on the present value of the
determined as the dependent variable, and green finance and renewable
variable. The coefficient of issued green bonds is 0.749, expressing that
energy are explanatory variables. In contrast, the green economy inno-
increased green bonds in OECD countries would bring about more
vation index (GEII), GDP per capita, and good governance indicators are
achievements in the carbon neutrality target. This finding supports the
selected as control variables.
previous literature, such as that of [22,23,25,26], which revealed the
positive correlation between green finance and carbon emissions 3.2. Data description
reduction. Due to its characteristics, such as more reliable guarantee and
reduced investment, Green bonds can increase investment in environ-
This study empirically investigates the influences of green finance
mentally friendly projects, which is the main requirement to promote
and renewable energy sources on 38 OECD member states
carbon reduction targets. The coefficient of Renewable energy deploy- ’ carbon
neutrality target covering period from 2013 to 2021. The year of 2013 is
ment is positive at the conventional significance level, with A rise in
chosen as the start of the time period is because that this year was a
green energy consumption of 1% resulting in an improvement of nearly
bumper year of issued green bonds becoming a popular financing tool
0.048% in enhancing the carbon neutrality target. However, it should be
[29]. The calculation of carbon neutral capacity index is based on the
noted that the positive effect of renewable energy consumption is
carbon sinks and the model of maximum potential dissolution for car-
created when the reduction of fossil energy consumption is also created
bonates, following the method of [15]. The green bond that has been
simultaneously. These two simultaneous occurred phenomenon gives
issued is used as a measure of green finance and renewable energy
attention to the energy transition progress [32]. expressed that energy
consumption are determined as explanatory variables. In addition, the
transition not only means increasing renewable energy consumption but
green economy innovation index (GEII), GDP per capita, and good
policies should also be adopted to substituting renewable energy for
governance indicators are selected as control variables. The primary
fossil fuels. In addition, increasing the green innovation index impacts
information of variables is provided in the following Table 1.
carbon emissions reduction in OECD countries. The magnitude of the Table 2
System GMM estimation results. Table 1 Variable Coefficient Z-stat. p-value
A primary information of variables. Lagged CN 0.132 24.393 0.0034 Role in model Variable Symbol Unit Source GB 0.749 17.584 0.018 Dependent Carbon neutral CN REC 0.048 10.382 0.063 – Calculated variable capacity index based on [15] GEII 0.558 8.684 0.049 Explanatory Issued green bonds GB Billon US www.climate GDPPC 0.103 14.583 0.004 variable dollars bonds.net GGOV 0.004 7.955 0.019 Renewable energy REC Exajoules BP Obs. = 342 consumption
AR (1) = − 4.32 (p-value: 0.000) Control Green economy GEII AR (2) – Calculated = − 1.444 (p-value: 0.185) variable innovation index based on [41] Hansen-P: 0.837 GDP per capita GDPPC Current US World Bank
Note: CN, GB, REC, GEII, GDPPC, and GGOV represent carbon neutrality, issued dollars
green bonds, renewable energy consumption, Green economy innovation index, Good governance GGOV –
GDP per capita, and good governance, respectively. 281 C. Jin et Renewable Energy 211 al. (2023) 279–284
impact of this variable is larger than that of renewable energy deploy- Table 4
ment, expressing that in OECD states, the promotion of green innovation
Robustness check results (changing estimation technique).
may lead to better achievement of the carbon neutrality target compared Variable Coefficient p-value
to renewable energy deployment. Furthermore, any increase in GDP per
capita in these countries can surge carbon neutrality. In other words, Lagged CN 0.483 0.049 GB 0.193 0.031
with increasing GDP per capita, the consumption of green goods and REC 0.003 0.011
services increases in society, which means advancing to the achievement GEII 0.048 0.302
of carbon neutrality. This finding contrasts [33], which shows an GDPPC 0.099 0.043
adverse influence of GDP per-capita on environmental protection in GGOV 0.003 0.406
Sub-Saharan African countries. It is in line with [34], who depicted the
Note: CN, GB, REC, GEII, GDPPC, and GGOV represent carbon neutrality, issued
positive role of GDP per capita on CO2 emissions reduction in China.
green bonds, renewable energy consumption, green economy innovation index,
Moreover, by improving the quality of good governance, the carbon
GDP per capita, and good governance, respectively.
neutrality target can be easier to achieve in OECD member states. The
suitable governance dimensions, such as political stability and quality of
SMEs entering the green markets. In order to measure the impacts of
regulations, are two essential factors in promoting environmental pol-
uncertainty on carbon neutrality in the case of OECD countries, the
icies to achieve carbon neutrality targets in OECD member states. This
world uncertainty index is gathered from the Website of World Uncer-
finding supports [35,36], who confirmed the importance of good
tainty Index and added to Equation (1), with the estimation results
governance to realize carbon emission reduction in countries. provided in Table 5.
Then robustness check is tested to confirm the validity of the results.
Based on the results, uncertainty show a negative effect with the
Specifically, the CO2 emissions is utilized to replace the carbon
most significant magnitude of coefficient among other variables on the
neutrality index variable, and then the system GMM is also employed to
carbon neutrality of OECD, expressing that uncertainty is a vital adverse
re-calculate the news model. CO2 emissions have the largest share
situation to promote the target of carbon neutrality in these economies.
among other gases in GHGs in global warming and air pollution issues.
A new empirical study [37] concluded that economic uncertainty
Hence, selecting this variable would be impactful in checking the co-
harshly affects green innovation enhancement and private investors’
efficients of GB and REC. Since CO2 emissions are an adverse variable
participation in green projects [38]. encouraged member countries to
for OECD countries, it is expected that the direction of the influence of
carry out several economic reforms facing uncertain global economies.
the independent variables on CO2 emissions are opposite to the signs of
Although the complexities of the global economic markets, the spread of
the effects of the variables on the carbon neutrality variable (based on
the corona disease and various geopolitical tensions have caused more
Table 2). Table 3 provides the results of robust test.
uncertainty in the OECD countries, which will be the hindering factor in
Despite the insignificant coefficient of the lagged CO2 emissions, the
advancing the goals of carbon neutralization. The critical point is that if
other variables have significant impacts on CO2 emissions. In addition,
the reduction of carbon dioxide emissions occurs from the place of
by increasing issued green bonds, renewable energy deployment, green
reduction of dependence on fossil fuels over time, it will resolve part of
innovation, GDP per capita, and good governance, CO2 emissions
the economic uncertainty because one of the uncertain subcategories in
reduction in OECD countries. These findings validate the last empirical
the economy is the occurrence of an oil shock in the world, which can
results, as reported in Table 2.
have destructive effects on the economic structures and financial resil-
Next, another robustness check through changing the estimator of
ience of countries (predominantly industrialized countries that import
coefficients is carried out. To this end, the panel fixed effect estimation
crude oil). Since the first oil shock in 1973 due to the Arab-Israeli war
technique incorporating both time-fixed and individual-fixed effects is
[39] until now, the countries have tried to improve the resilience of their
used. The re-computed result through the fixed effect panel is repre-
economic system to the oil shock, but despite that, the oil shock as an
sented in the following Table 4.
exogenous shock is one of the types of uncertainty.
According to Table 4, the primary explanatory variables (issued
green bonds and renewable energy deployment) have positive and sig-
6. Conclusions and policy recommendations
nificant coefficients similar to those in Table 2, ascertaining the reli-
ability of empirical findings.
6.1. Concluding remarks 5. Discussions
Climate change, which is continuously occurring due to the non-
compliance of environmental issues, the significant growth of industri-
Numerous studies (e.g. Ref. [31]) have emphasized the role of un-
alization, and the increase in population, has caused various challenges
certainty in CNG’s achievement. Uncertainty can bring more risks for
worldwide. Many countries have committed to reducing carbon emis-
economic players, decelerating economic flourishing and policies’ con-
sions based on an international roadmap entitled “carbon neutrality,”
sequences. Regarding carbon neutrality, any increase in economic un-
meaning a balance between absorbing and emitting carbon. In this
certainty may lead to a higher risk to green project investment, the
paper, the influence of green finance and renewable energy sources on
intention of individuals to accept green commodities, and avoiding Table 5 Table 3
Impacts of uncertainty on carbon neutrality.
Robustness check results (changing dependent variable). Variable Coefficient Z-stat. p-value Variable Coefficient Z-stat. p-value Lagged CN 0.139 13.200 0.004 Lagged CO2 0.038 19.382 0.119 UNC − 0.593 − 19.384 0.028 GB − 0.052 − 10.943 0.000 GB 0.019 10.847 0.039 REC − 0.013 − 14.594 0.048 REC 0.004 18.797 0.078 GEII − 0.694 − 10.393 0.039 GEII 0.233 9.844 0.004 GDPPC − 0.393 − 22.493 0.074 GDPPC 0.119 13.730 0.038 GGOV − 0.092 − 13.293 0.008 GGOV 0.083 6.739 0.063
Note: CO2, GB, REC, GEII, GDPPC, and GGOV represent carbon dioxide emis-
Note: CN, UNC, GB, REC, GEII, GDPPC, and GGOV represent carbon neutrality,
sions, issued green bonds, renewable energy consumption, Green economy
uncertainty, issued green bonds, renewable energy consumption, Green econ-
innovation index, GDP per capita, and good governance, respectively.
omy innovation index, GDP per capita and good governance, respectively. 282 C. Jin et Renewable Energy 211 al. (2023) 279–284
38 OECD member states’s carbon neutrality target covering period of
neutralization will be investigated in future research. In addition to the
2013–2021 were investigated. According to the estimated findings, it
aspect of the disease, corona disease has economic and social di-
can be concluded that the lagged value of carbon neutrality has a pos-
mensions, which changed many economic markets. Therefore, to
itive correlation at conventional significance level on the variable’s
explore the link between green financing, renewable energies, and
value in present time, expressing that the improvement in the situation
achieving carbon neutrality will be extracted more precisely with the
of carbon emission reduction in the OECD countries will create a part of
variable controlling the corona disease. It is also recommended that
the improvement of carbon neutrality in the future. The coefficient of
analyzing the correlation between green financing and carbon neutrality
issued green bonds is 0.749, meaning that increased issued green bonds
at state level within OECD group to provide more practical results to
in OECD countries would bring about more achievements in the carbon
policymakers. It is suggested to use advanced statistical methods such as
neutrality target. Renewable energy deployment displays a favorable
machine learning and artificial neural network for scenario creation and
effects on CNT, indicating that a rise of 1% in the consumption of
future study on the correlation between green financing and carbon
renewable energy results in an increase of nearly 0.048% in achieving
neutralization in OECD countries. The last suggestion for future research
CNT. In addition, increasing the green innovation index affects carbon
is to use qualitative methods of multi-criteria decision-making, which
emissions reduction in OECD countries. The magnitude of the impact of
can create different results for this quantitative research by using ex-
this variable is larger than the impact of renewable energy deployment, perts’ opinions.
expressing that in OECD states, the promotion of green innovation may
lead to better achievement of the carbon neutrality target compared to renewable energy deployment.
Declaration of competing interest
Furthermore, any increase in GDP per capita in these countries can
surge carbon neutrality. With improving the quality of good governance,
The authors declare that they have no known competing financial
the carbon neutrality target can be easier to achieve in OECD member
interests or personal relationships that could have appeared to influence
states. Moreover, uncertainty has a negative coefficient with the most
the work reported in this paper.
significant magnitude of impacts among other variables on the carbon
neutrality of OECD, expressing that uncertainty is a vital adverse situ- Data availability
ation to promote the target of carbon neutrality in these economies.
Data will be made available on request.
6.2. Policy implications Acknowledgement
In light of the concluding points, the applicable policies im; ications
can be recommended as follows:
This study was supported by 2023 Zhejiang Philosophy and Social
Since the green bonds has expedited the achievement of the carbon
Sciences Leading Talents Cultivation Special Project (NO. 23YJRC14ZD-
neutrality objective, it is suggested that OECD members should foster
2YB), 2023 Zhejiang Soft Science Research Project (NO. 2023C35066),
the market of green finance across states. To this end, the role of banking
and Zhejiang General Scientific Research Projects of Department of
and non-banking financial sector in green financial markets should be Education ((NO. Y202248447).
paid more attention. In addition, the balanced development of a green
financial market can provide transparent information on prioritized References
green projects for individuals and enterprises. Moreover, an efficient
green financing market may decrease the uncertainties in green projects,
[1] E. Chan, Climate change is the world’s greatest threat – in Celsius or Fahrenheit?
which is the critical element of investors
J. Environ. Psychol. 60 (2018) 21
’ participation. The time and –26.
[2] R. Santos, R. Bakhshoodedh, Climate change/global warming/climate emergency
geographical constraints of participating in green projects are removed
versus general climate research: comparative bibliometric trends of publications,
through such a market. Since power generation contributes highly to
Heliyon 7 (11) (2021), e08219, https://doi.org/10.1016/j.heliyon.2021.e08219.
global CO2 emissions due to burning fossil fuels, the policy of sustain-
[3] S. Becker, T. Bouzdine-Chameeva, A. Jaegler, The carbon neutrality principle: a
ability of power generation should be more drawn attention by OECD
case study in the French spirits sector, J. Clean. Prod. 274 (2020), 122739, https://
doi.org/10.1016/j.jclepro.2020.122739.
countries. Sustainable power generation generally needs accurate plans
[4] URL: https://www.reuters.com/business/sustainable-business/indias-gail-sets-20
for three phases locating, investing, and utilizing. The counties can
40-goal-net-zero-carbon-emissions-2022-08-26/ Reuters, India’s GAIL sets 2040
gradually go towards more sustainable electricity generation through
goal for net zero carbon emissions, , 2022. (Accessed 12 January 2023).
[5] N. Stern, A. Valero, Innovation, growth and the transition to net-zero emissions,
these three phases. In addition, the participation of SMEs in green as-
Res. Pol. 50 (9) (2021), 104293, https://doi.org/10.1016/j.respol.2021.104293.
pects of the economy is essential due to their innovation and agility
[6] X. Sun, Y. Dong, Y. Wang, J. Ren, Sources of greenhouse gas emission reductions in
skills. However, owing to their weak financial power, the government
OECD countries: composition or technique effects, Ecol. Econ. 193 (2022), 107288,
https://doi.org/10.1016/j.ecolecon.2021.107288.
should support these enterprises through some policies like green loans,
[7] OECD, Environment at a glance indicators, URL: https://www.oecd.org/environ
tax exemptions, and green guarantees [40]. believe that SMEs can pro-
ment/environment-at-a-glance/Climate-Change-Archive-February-2020.pdf, ,
mote green targets in countries through increasing eco-innovation,
2019. (Accessed 4 January 2023).
[8] OECD, OECD environmental performance reviews: Denmark 2019, URL: https
greening technology, and enhancing the green skills of their labor
://www.oecd.org/greengrowth/oecd-environmental-performance-reviews-den
forces. The utilization of carbon market policy is another practical de-
mark-2019-1eeec492-en.htm, , 2019. (Accessed 13 January 2023).
cision of OECD countries. Although some countries (e.g., the
[9] D. Yang, Z. Chen, Y. Yang, P. Nie, Green financial policies and capital flows, Phys.
Stat. Mech. Appl. 522 (2019) 135
cap-and-trade framework by the EU members) have established the –146.
[10] N. Metawa, E. Dogan, D. Taskin, Analyzing the nexus of green economy, clean and
carbon market instrument, the weaknesses (e.g., price manipulation,
financial technology, Econ. Anal. Pol. 76 (2022) 385–396.
collusion, greenwashing, and money laundering) have made the markets
[11] D. Bendig, L. Kleine-Stegemann, C. Schulz, D. Eckardt, The effect of green startup
inefficient. Therefore, a group of reforms is essential to make the carbon
investments on incumbents’ green innovation output, J. Clean. Prod. 376 (2022),
134316, https://doi.org/10.1016/j.jclepro.2022.134316.
market so impactful for the carbon neutrality target.
[12] Allied Market Research, Sustainable finance market, URL: https://www.alliedmark
etresearch.com/sustainable-finance-market-A19436, , 2022. (Accessed 3 January
6.3. Recommendation s for future studies 2023).
[13] Y. Zhang, How economic performance of OECD economies influences through
green finance and renewable energy investment resources? Resour. Pol. 79 (2022),
This research had an innovative contribution along with practical
102925 https://doi.org/10.1016/j.resourpol.2022.102925.
policies for the policymakers in the area of the target of carbon
[14] S. Zaidi, M. Hussian, Q. Zaman, Dynamic linkages between financial inclusion and
carbon emissions: evidence from selected OECD countries, Resour. Environ.
neutralization. The variable effect of corona disease on carbon
Sustain. 4 (2021), 100022, https://doi.org/10.1016/j.resenv.2021.100022. 283 C. Jin et Renewable Energy 211 al. (2023) 279–284
[15] X. Bai, S. Zhang, C. Li, L. Xiong, F. Song, C. Du, M. Li, Q. Luo, Y. Xue, S. Wang,
[32] M. Swilling, I. Nygaard, W. Kruger, H. Wlokas, T. Jhetam, M. Davies, M. Jacob,
A carbon neutrality capacity index for evaluating carbon sink contributions,
M. Morris, G. Robbins, M. Funder, U. Hansen, K. Olsen, E. Davy, L. Kitzing,
Environ. Sci. Eco Technol. (2023), 100237, https://doi.org/10.1016/j.
B. Khan, T. Cronin, Linking the energy transition and economic development: a ese.2023.100237. In Press.
framework for analysis of energy transitions in the global South, Energy Res. Social
[16] N. Iqbal, K. Abbasi, R. Shinwari, W. Guangcai, M. Ahamad, K. Tang, Does exports
Sci. 90 (2022), 102567, https://doi.org/10.1016/j.erss.2022.102567.
diversification and environmental innovation achieve carbon neutrality target of
[33] J. Alaganthiran, M. Anaba, The effects of economic growth on carbon dioxide
OECD economies? J. Environ. Manag. 291 (2021), 112648 https://doi.org/
emissions in selected Sub-Saharan African (SSA) countries, Heliyon 8 (11) (2022),
10.1016/j.jenvman.2021.112648.
e11193, https://doi.org/10.1016/j.heliyon.2022.e11193.
[17] R. Puertas, L. Marti, Eco-innovation and determinants of GHG emissions in OECD
[34] B. Aslam, J. Hu, S. Shahab, A. Ahmad, M. Saleem, S. Shah, M. Javed, M. Aslam,
countries, J. Clean. Prod. 319 (2021), 128739, https://doi.org/10.1016/j.
S. Hussian, M. Hassan, The nexus of industrialization, GDP per capita and CO2 jclepro.2021.128739.
emission in China, Environ. Technol. Innovat. 23 (2021), 101674, https://doi.org/
[18] H. Zhang, Pathways to carbon neutrality in major exporting countries: the 10.1016/j.eti.2021.101674.
threshold effect of digital transition, Environ. Sci. Pollut. Control Ser. (2022),
[35] Danish, M. Baloch, B. Wang, Analyzing the role of governance in CO2 emissions
https://doi.org/10.1007/s11356-022-22592-x.
mitigation: the BRICS experience, Struct. Change Econ. Dynam. 51 (2022)
[19] T. Hassan, H. Song, Y. Khan, D. Kirikkaleli, Energy efficiency a source of low 119–125.
carbon energy sources? Evidence from 16 high-income OECD economies, Energy
[36] N. Goud, Corporate governance: does it matter management of carbon emission
243 (2022), 123063, https://doi.org/10.1016/j.energy.2021.123063.
performance? An empirical analyses of Indian companies, J. Clean. Prod. 379 (1)
[20] J. Lee, A. Yucel, T. Islam, Convergence of CO2 emissions in OECD countries,
(2022), 134485, https://doi.org/10.1016/j.jclepro.2022.134485.
Sustain. Technol. Entrepren. 2 (1) (2023), 100029, https://doi.org/10.1016/j.
[37] X. Cui, C. Wang, A. Sensoy, J. Liao, X. Xie, Economic policy uncertainty and green stae.2022.100029.
innovation: evidence from China, Econ. Modell. 118 (2023), 106104, https://doi.
[21] B. Anderson, E. Cammeraat, A. Dechezlepretre, L. Dressler, N. Gonne, G. Lalanne,
org/10.1016/j.econmod.2022.106104.
J. Guilhoto, K. Theodoropoulos, Designing policy packages for a climate-neutral
[38] OECD, Uncertain global economy should prompt governments to embark on
industry: a case study from The Netherlands, Ecol. Econ. 205 (2023), 107720,
reforms that boost sustainable growth, raise incomes and increase opportunities for
https://doi.org/10.1016/j.ecolecon.2022.107720.
all, URL: https://www.oecd.org/economy/uncertain-global-economy-should-pro
[22] L. Huang, Y. Cao, Y. Zhu, Is there any recovery power for economic growth from
mpt-governments-to-embark-on-reforms-that-boost-sustainable-growth-raise-inco
green finance? Evidence from OECD member countries, Econ. Change Restruct.
mes-and-increase-opportunities-for-all.htm, , 2019. (Accessed 10 January 2023).
(2022), https://doi.org/10.1007/s10644-022-09458-5.
[39] O. Polat, Time-varying propagations between oil market shocks and a stock
[23] C. Koziol, J. Proelss, P. Robmann, D. Schweizer, The price of being green, Finance
market: evidence from Turkey, Borsa Istanbul Rev. 20 (3) (2020) 236–243.
Res. Lett. 50 (2022), 103285, https://doi.org/10.1016/j.frl.2022.103285.
[40] N. Chatzistamoulou, E. Tyllianakis, Green growth & sustainability transition
[24] Y. Han, J. Li, Should investors include green bonds in their portfolios? Evidence for
through information. Are the greener better informed? Evidence from European
the USA and Europe, Int. Rev. Financ. Anal. 80 (2022), 101998, https://doi.org/
SMEs, J. Environ. Manag. 306 (2022), 114457, https://doi.org/10.1016/j. 10.1016/j.irfa.2021.101998. jenvman.2022.114457.
[25] W. Peng, L. Xiong, Managing financing costs and fostering green transition: the role
[41] S. Holger, V. Sandra, H. Jurgen-Friedrich, Green economy innovation index (GEII) -
of green financial policy in China, Econ. Anal. Pol. 76 (2022) 820–836.
a normative innovation approach for Germany & its FEW nexus, Energy Proc. 142
[26] A. Mamun, S. Boubaker, D. Nguyen, Green finance and decarbonization: evidence (2017) 2310–2316.
from around the world, Finance Res. Lett. 46 (2022), 102807, https://doi.org/
[42] S. Xiang, Y. Cao, Green finance and natural resources commodities prices: evidence
10.1016/j.frl.2022.102807. Part B.
from COVID-19 period, Resour. Pol. 80 (2023), 103200, https://doi.org/10.1016/
[27] L. Pastor, R. Stambaugh, L. Taylor, Dissecting green returns, J. Financ. Econ. 146 j.resourpol.2022.103200. (2) (2022) 403–424.
[43] J. Bei, C. Wang, Renewable energy resources and sustainable development goals:
[28] M. Irfan, A. Razzaq, A. Sharif, X. Yang, Influence mechanism between green
evidence based on green finance, clean energy and environmentally friendly
finance and green innovation: exploring regional policy intervention effects in
investment, Resour. Pol. 80 (2023), 103194, https://doi.org/10.1016/j.
China, Technol. Forecast. Soc. Change 182 (2022), 121882, https://doi.org/ resourpol.2022.103194.
10.1016/j.techfore.2022.121882.
[44] J. Xu, S. She, P. Gao, Y. Sun, Role of green finance in resource efficiency and green
[29] Climate Bonds Initiative, 2013 overview: the dawn of an age of green bonds?, URL:
economic growth, Resour. Pol. 81 (2023), 103349, https://doi.org/10.1016/j.
https://www.climatebonds.net/2014/02/2013-overview-dawn-age-green-bonds, resourpol.2023.103349.
2014. (Accessed 5 January 2023).
[45] Y. Shang, Y. Lian, H. Chen, F. Qian, The impacts of energy resource and tourism on
[30] Q. Wang, Y. Geng, X. Xia, Revisited globalization’s impact on total environment:
green growth: evidence from Asian economies, Resour. Pol. 81 (2023), 103359,
evidence based on overall environmental performance index, Int. J. Environ. Res.
https://doi.org/10.1016/j.resourpol.2023.103359.
Publ. Health 18 (2021), 11419.
[46] Y. Shang, L. Zhu, F. Qian, Y. Xie, Role of green finance in renewable energy
[31] H. Wang, Y. Geng, X. Xia, Q. Wang, Impact of economic policy uncertainty on
development in the tourism sector, Renew. Energy 206 (2023) 890–896, https://
carbon emissions: evidence from 137 multinational countries, Environ. Res. Public
doi.org/10.1016/j.renene.2023.02.124.
Health 19 (4) (2022), https://doi.org/10.3390/ijerph19010004. 284
Document Outline

• Green finance, renewable energy and carbon neutrality in OECD countries
  • 1 Introduction
  • 2 Literature review
  • 3 Data, theory and emprical model
    • 3.1 Theoretical baseline
    • 3.2 Data description
    • 3.3 Model specification
  • 4 Empirical results
  • 5 Discussions
  • 6 Conclusions and policy recommendations
    • 6.1 Concluding remarks
    • 6.2 Policy implications
    • 6.3 Recommendation s for future studies
  • Declaration of competing interest
  • Data availability
  • Acknowledgement
  • References