Abstract
Green finance has been valued and promoted by Regional Comprehensive Economic Partnership (RCEP) countries for its attribute of supporting green and sustainable development. However, the fossil fuel–centric growth pattern poses a threat to the sustainable development of RCEP countries. The existing literature remains inadequate regarding the relationship between green finance and fossil energy consumption. An in-depth understanding and empirical examination of the nexus between green finance development and fossil energy consumption in RCEP countries is key to successful policymaking and sustainable development. This study proposes a theoretical framework for analyzing the nexus between green finance and fossil energy consumption. Then, a green finance development index is constructed by using the entropy weight method based on green credits, green securities, and green investments. By utilizing method of moment quantile regression (MMQR), panel data of 10 RCEP countries from 2008 to 2020 are investigated. The results demonstrate a strong nonlinear pattern of green finance’s impact on reducing fossil energy consumption. Conventional finance and fossil energy consumption from the preceding period significantly promote fossil energy consumption, while green technology serves as a mitigating factor for fossil energy consumption. However, the impacts of education and environmental expenditure on fossil energy consumption are limited and inconsistent. Hence, the relevant practitioners, including governments and policymakers, are encouraged to collaboratively promote the green finance policies, and devise tailor-made strategies based on countries’ features. Additionally, this study recommends that the RCEP countries incorporate research and development of green technologies, as well as environmental and educational expenditures, into the policymaking process.
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Data Availability
The data is available upon reasonable request.
Abbreviations
- RCEP:
-
Regional Comprehensive Economic Partnership
- ASEAN:
-
The Association of Southeast Asian Nations
- APEC:
-
Asia-Pacific Economic Cooperation
- CBI:
-
Climate Bond Initiative
- MMQR:
-
Method of moment quantile regression
- CSD:
-
Cross-sectional dependence
- SCH:
-
Slope coefficient heterogeneity
- J-B:
-
Jarque-Bera
- DICE:
-
Dynamic Integrated Climate-Economy
- PSTR:
-
Panel smooth transition regression
- PM:
-
Particulate matter
- LM:
-
Lagrange multiplier
- OLS:
-
Ordinary Least Squares
- BSQR:
-
Bootstrap Quantile Regression
- GDP:
-
Gross domestic product
- EWM:
-
Entropy weighted method
- EKC:
-
Environmental Kuznets curve
- CIPS:
-
Augmented Im, Pesaran, and Shin test
- EU:
-
European Union
- OECD:
-
Organization for Economic Co-operation and Development
- ADF:
-
Augmented Dickey-Fuller testing
- IMF:
-
International Monetary Fund
- WDI:
-
World Development Indicators
- R:
-
Financial resources allocation ratio
- S:
-
Skewness value
- N:
-
Degree of freedom
- K:
-
Kurtosis value
- τ:
-
τTh quantiles
- T:
-
Time
- GF:
-
Green finance
- CF:
-
Conventional finance
- TECH:
-
Green technology
- ENV:
-
Environmental expenditure
- CONS:
-
Fossil energy consumption at t-1
- FEC:
-
Fossil energy consumption
- FEI:
-
Fossil energy intensity
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Acknowledgements
We are sincerely grateful to the editor and two anonymous reviewers for valuable and constructive comments and suggestions. Nevertheless, any shortcomings that remain in this research paper are solely our responsibility.
Funding
This work was supported by the Key Program of the National Social Science Foundation of China "Study on the Deepening of the Cooperation Mechanism between China and ASEAN in the Context of the "Belt and Road" Initiative and Uncertainty Shocks" [22AGJ014], The Bagui Scholars Program of Guangxi Zhuang Autonomous Region “China-ASEAN Big Data Research” [2019A39], and the Interdisciplinary Scientific Research Foundation of Applied Economics of Guangxi University [2023JJJXC25].
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All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Jiwei Chen. The first draft of the manuscript was written by Jiwei Chen, and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.
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Chen, J., Zhang, J. The nexus between green finance and energy consumption in regional comprehensive economic partnership countries. Environ Sci Pollut Res 31, 14071–14087 (2024). https://doi.org/10.1007/s11356-024-32003-y
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DOI: https://doi.org/10.1007/s11356-024-32003-y