Borsa Istanbul Review · 2021 · 570 citations · 20 references
Social SciencesEconomicsFinanceEconometricsEnvironmental EconomicsFinancial EconometricsCarbon Emissions ManagementCarbon Footprint ReductionCarbon MarketsCarbon PricingClimate FinanceCarbon DioxideDependence StructureGreen FinancingGreenhouse Gas Emissions Reduction FinancingQuantile RegressionSample Quantiles
Variations in the green finance–CO₂ relationship may stem from market conditions, such as bullish or bearish trends and country‑specific factors. The study investigates how green finance relates to CO₂ emissions across the top ten economies that support green finance. The authors employ quantile‑on‑quantile regression to analyze the dependence between different quantiles of green finance and CO₂ emissions. The analysis confirms that green finance generally reduces CO₂ emissions, though the strength of this effect differs across quantiles, and positions green finance as the most effective strategy for emission reduction.
This study examines the relationship between green finance and carbon dioxide (CO2) emissions in the top ten economies that support green finance (Canada, Denmark, Hong Kong, Japan, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States). This study uses quantile on quantile regression (QQR), introduced by Sim and Zhou (2015), to examine the dependence structure between different quantiles of green finance and CO2 emissions. Our overall findings confirm the negative impact of green finance on CO2 emissions; however, this relationship varies across the different quantiles of the two variables. This variation might be due to green finance market conditions (e.g., bearish or bullish) and country-specific market conditions. The findings in the study confirm that green finance is the best financial strategy for reducing CO2 emissions.
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