INFLUENCE OF GREEN FINANCE ON ENVIRONMENTAL SUSTAINABILITY: LESSONS FROM DEVELOPED TO DEVELOPING COUNTRIES

Abstract

During the era of globalization when human activities put excessive stress on the environment, an instrument like green finance is much required as it ensures flow of capital towards different sustainable development priorities. This study aims to examine the influence of green finance on environmental sustainability in both developed and developing countries by employing panel ARDL estimation techniques. Panel dataset of developed and developing countries from 1995 to 2021 are considered in this study. Further, this paper portrays a comparable picture of influence of green finance on environmental sustainability between developed and developing countries. The outcomes of panel ARDL estimation technique confirms a significant positive long-run influence of green finance on environmental sustainability in both developed and developing countries. But this this study observes a smaller but favorable influential effect of green finance on environmental sustainability in developing countries. Results of this study recommends policy makers of developing countries to put more focus on green finance at the timing of framing different policies so that we can minimize the pressure on mother nature arise due to economic activities and we can move faster towards the goal of sustainable development.