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Energy Transitions and Green Finance towards Sustainability

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (30 June 2023) | Viewed by 21571

Special Issue Editors

College of Business Administration, University of Sharjah, Sharjah 27272, United Arab Emirates
Interests: energy economics; green economy; environmental economics; sustainable development
GOVCOPP – Research Unit on Governance, Competitiveness and Public Policies; Higher Institute of Accounting and Administration (ISCA-UA), University of Aveiro, 3810-500 Aveiro, Portugal
Interests: financial markets; sustainable finance; energy finance; financial economics
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

It is an admitted fact that climate change and global warming are among the major worldwide issues with a capability to impose existential threats to livings on the planet. The volume of carbon emissions from the use of natural resources has dramatically increased in the last two decades mainly because of the increasing levels of population, urbanization, output production, transportation, tourism and industrialization in the world. 

The adaption of renewable energy systems and the action of governments towards energy transitions and environmentally friendly projects play significant roles in sustainable development. In this respect, green finance is a crucial argument and power of governments in hand at the crossroads of financial, socio-economic and environmental challenges since it uses financial instruments to facilitate and accelerate the energy transition for the sake of a low-carbon economy. To highlight the importance of green finance and to unsheathe its urgent potential in the financing of environmentally friendly projects and ensuring the sustainability of the environment and natural resources while simultaneously ensuring an appropriate return for the investors, this call for papers will act as a specialized forum for the dissemination of thought-provoking research and ideas.

The guest editors welcome both theoretical and empirical studies that focus on a multi-disciplinary investigation concentrated around the idea of green finance in the development of energy transitions from a technology, environmental, economic and policy perspective. 

Dr. Eyup Dogan
Dr. Mara Teresa da Silva Madaleno
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • green finance
  • renewable energy
  • clean energy
  • sustainable growth
  • fossil fuel divestment
  • R&D and innovation

Published Papers (10 papers)

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Research

21 pages, 3488 KiB  
Article
The Impact of Green Finance Pilot Policy on Carbon Intensity in Chinese Cities—Based on the Synthetic Control Method
by Libin Feng and Zhengcheng Sun
Sustainability 2023, 15(15), 11571; https://doi.org/10.3390/su151511571 - 26 Jul 2023
Cited by 1 | Viewed by 1077
Abstract
As an innovative and efficient approach, green finance unlocks the potential to achieve China’s carbon peak and neutrality goals. This study takes China’s Green Finance Pilot Scheme as a quasi-natural experience and adopts the synthetic control method to evaluate the carbon intensity reduction [...] Read more.
As an innovative and efficient approach, green finance unlocks the potential to achieve China’s carbon peak and neutrality goals. This study takes China’s Green Finance Pilot Scheme as a quasi-natural experience and adopts the synthetic control method to evaluate the carbon intensity reduction effects of the Green Finance Pilot Policy (GFPP) based on the city-level panel data in China from 2008 to 2019. We find that the GFPP significantly reduces the carbon intensity of pilot cities in eastern China, such as Guangzhou, Huzhou, and Quzhou. However, implementing GFPP does not achieve the desired reduction effect in Nanchang and Guiyang situated in central and western China. After multiple robustness tests, it can be proved that the preceding conclusions are robust. The mechanism analysis results show that the GFPP can promote carbon intensity reduction through financial agglomeration and green innovation. This study is conducive to assessing the policy effectiveness of China’s GFPP and provides empirical evidence for promoting green finance system construction in China. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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14 pages, 242 KiB  
Article
Green Finance, Enterprise Energy Efficiency, and Green Total Factor Productivity: Evidence from China
by Hepei Li, Chen Chen and Muhammad Umair
Sustainability 2023, 15(14), 11065; https://doi.org/10.3390/su151411065 - 14 Jul 2023
Cited by 12 | Viewed by 2038
Abstract
Climate change has become a global issue that requires collective efforts, and green finance policies are an important way to address this problem and promote enterprise development. This paper uses listed company data and city panel data to investigate the utility and mechanisms [...] Read more.
Climate change has become a global issue that requires collective efforts, and green finance policies are an important way to address this problem and promote enterprise development. This paper uses listed company data and city panel data to investigate the utility and mechanisms of the influence of the development of green finance in different cities on the Green Total Factor Productivity (GTFP) of enterprises. The conclusion was that green finance can improve enterprise GTFP, which remained significant after conducting a series of robustness tests. The mechanism analysis showed that green finance can improve enterprise GTFP by promoting energy conservation and emission reduction. The heterogeneity analysis indicated that green finance has a better effect on non-state-owned enterprises, large-scale enterprises, and enterprises with weak financing constraints. This paper enriches the literature that addresses the impact of green finance and the influential factors among GTFP. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
13 pages, 250 KiB  
Article
Construction of the Pilot Free Trade Zone and Chinese Green Total Factor Energy Efficiency
by Haikuo Zhang and Chaobo Zhou
Sustainability 2023, 15(12), 9830; https://doi.org/10.3390/su15129830 - 20 Jun 2023
Cited by 1 | Viewed by 898
Abstract
In the context of China’s “double carbon” target, paying attention to regional green total factor energy efficiency (GTFEE) is crucial for ensuring a fundamental guarantee for China’s free trade zones for the promotion of sustainable development in China’s free trade zones. However, the [...] Read more.
In the context of China’s “double carbon” target, paying attention to regional green total factor energy efficiency (GTFEE) is crucial for ensuring a fundamental guarantee for China’s free trade zones for the promotion of sustainable development in China’s free trade zones. However, the existing literature lacks focus on the environmental effects of these zones. This study takes advantage of the pilot free trade zone (PFTZ) implemented in 2013 as a natural experiment, utilizing panel data from 2009 to 2020 for Chinese prefecture-level cities. It adopted a progressive difference-in-difference model to assess the effect of the PFTZ on GTFEE. The findings demonstrate a remarkable improvement in GTFEE due to the PFTZ, which remains robust even after conducting robustness checks, including the parallel trend test. The PFTZ achieves this improvement by facilitating industrial structure upgrading and promoting green technology innovation. The positive influence of the PFTZ on GTFEE is particularly prominent in coastal cities and non-resource-based cities. This study contributes to the understanding of the environmental effects of free trade zones, providing a direct response to the key question of whether the free trade zone policy can effectively support high-quality economic development in the new era. Moreover, it offers useful policy implications for advancing further openness, winning the battle against pollution, and boosting high-quality economic development. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
16 pages, 298 KiB  
Article
The Impact of Green Finance on High-Quality Economic Development in China: Vertical Fiscal Imbalance as the Moderating Effect
by Zhao Yang
Sustainability 2023, 15(12), 9350; https://doi.org/10.3390/su15129350 - 09 Jun 2023
Cited by 4 | Viewed by 1287
Abstract
The vigorous development of green finance has become a national strategy in China. Green finance is gradually becoming a key driver of high-quality economic development and a key area of concern for China’s economy and ecological environment. Based on the panel data of [...] Read more.
The vigorous development of green finance has become a national strategy in China. Green finance is gradually becoming a key driver of high-quality economic development and a key area of concern for China’s economy and ecological environment. Based on the panel data of 30 Chinese provinces from 2001 to 2019, we analyzed the impact and mechanism of vertical fiscal imbalance (VFI) and green finance (GF) on high-quality economic development (HQD) and then used the fixed-effect model and spatial Durbin model for empirical testing. We found that GF can significantly contribute to HQD, but VFI has a negative moderating effect in contrast to the positive effect of GF on HQD. This negative moderating effect is strongest in the central region. According to the analysis of the spatial econometric model based on geography, economy, and the nested spatial weight matrix, we found that the local GF has a negative spatial transmission effect on the HQD of other regions. Therefore, it is recommended that the coordinated development of green finance among regions be promoted, while affairs and expenditure responsibilities be reasonably distributed between the central and local governments to drive HQD effectively. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
18 pages, 2760 KiB  
Article
Impacts of Green Energy Expansion and Gas Import Reduction on South Korea’s Economic Growth: A System Dynamics Approach
by Azam Ghezelbash, Mitra Seyedzadeh, Vahid Khaligh and Jay Liu
Sustainability 2023, 15(12), 9281; https://doi.org/10.3390/su15129281 - 08 Jun 2023
Cited by 4 | Viewed by 1622
Abstract
South Korea, ranking ninth among the largest energy consumers and seventh in carbon dioxide emissions from 2016 to 2021, faces challenges in energy security and climate change mitigation. The primary challenge lies in transitioning from fossil fuel dependency to a more sustainable and [...] Read more.
South Korea, ranking ninth among the largest energy consumers and seventh in carbon dioxide emissions from 2016 to 2021, faces challenges in energy security and climate change mitigation. The primary challenge lies in transitioning from fossil fuel dependency to a more sustainable and diversified energy portfolio while meeting the growing energy demand for continued economic growth. This necessitates fostering innovation and investment in the green energy sector. This study examines the potential impact of green energy expansion (through integrating renewable energy and hydrogen production) and gas import reduction on South Korea’s economic growth using a system dynamics approach. The findings indicate that increasing investment in green energy can result in significant growth rates ranging from 7% to 35% between 2025 and 2040. Under the expansion, renewable energy scenario (A) suggests steady but sustainable economic growth in the long term, while the gas import reduction scenario (B) displays a potential for rapid economic growth in the short term with possible instability in the long term. The total production in Scenario B is USD 2.7 trillion in 2025 and will increase to USD 4.8 trillion by 2040. Scenario C, which combines the effects of both Scenarios A and B, results in consistently high economic growth rates over time and a substantial increase in total production by 2035–2040, from 20% to 46%. These findings are critical for policymakers in South Korea as they strive for sustainable economic growth and transition to renewable energy. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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24 pages, 1990 KiB  
Article
Analyzing the Role of Banks in Providing Green Finance for Retail Customers: The Case of Germany
by Marc Ringel and Saranda Mjekic
Sustainability 2023, 15(11), 8745; https://doi.org/10.3390/su15118745 - 29 May 2023
Cited by 3 | Viewed by 1890
Abstract
Our study investigates the role of banks in mobilizing investments in the energy transition with German retail customers. Based on a screening of a representative sample of 329 banks and follow-up in-depth interviews with 12 sector experts, our study shows that there are [...] Read more.
Our study investigates the role of banks in mobilizing investments in the energy transition with German retail customers. Based on a screening of a representative sample of 329 banks and follow-up in-depth interviews with 12 sector experts, our study shows that there are hardly any sustainable finance products offered. This is due to high transaction costs, missing information about energy projects and missing financial products which allow the bundling of small deposits and de-risking. To develop market supply for this segment, sector experts call for increased transparency in clean energy projects. Standardized, comprehensive and comparable labels or certifications for financial products seem to be necessary to lower uncertainty barriers with retail customers. EU action such as the Taxonomy Regulation is seen as necessary, but not sufficient to meet this demand. The German case delivers insights for other countries in Europe and globally, as sustainability finance challenges all signatories of the Paris Climate Agreement. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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16 pages, 1400 KiB  
Article
Research on the Coupling Coordination of Green Finance, Digital Economy, and Ecological Environment in China
by Lifang Zhang and Yuexu Zhao
Sustainability 2023, 15(9), 7551; https://doi.org/10.3390/su15097551 - 04 May 2023
Cited by 5 | Viewed by 1533
Abstract
This study analyzes the coupling coordination of green finance, digital economy, and ecological environment, and constructs an evaluation index system of coupling coordination degree. Based on the panel data of 30 provinces in China from 2011 to 2020, this study applies the coupling [...] Read more.
This study analyzes the coupling coordination of green finance, digital economy, and ecological environment, and constructs an evaluation index system of coupling coordination degree. Based on the panel data of 30 provinces in China from 2011 to 2020, this study applies the coupling coordination model, spatial autocorrelation model, and gray correlation model to analyze the spatio-temporal evolution characteristics of coupling coordination degree and driving factors. The results indicate that the overall level of green finance, digital economy, and ecological environment maintains steady development, among them, the digital economy is developing the fastest. The coupling coordination degree among the three subsystems exhibits an ascending trend and transitions from dissonance to coordination and displays significant global and local spatial autocorrelation characteristics. Regional disparities exist between the driving factors that influence the coupling coordination degree. Therefore, the existing green financial system should be optimized, coordination of green finance and digital economy synergies should be improved, and each region should devise a development strategy tailored to its regional characteristics. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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21 pages, 2949 KiB  
Article
Elucidating Finance Gaps through the Clean Cooking Value Chain
by Olivia Coldrey, Paul Lant and Peta Ashworth
Sustainability 2023, 15(4), 3577; https://doi.org/10.3390/su15043577 - 15 Feb 2023
Cited by 1 | Viewed by 3117
Abstract
The current supply of finance to enable universal access to clean fuels and technology for cooking does not match the scale of Sustainable Development Goal 7’s access challenge. To date, little attention has been given to the modalities of funding the clean cooking [...] Read more.
The current supply of finance to enable universal access to clean fuels and technology for cooking does not match the scale of Sustainable Development Goal 7’s access challenge. To date, little attention has been given to the modalities of funding the clean cooking transition at the macro level. Grounded in a review of academic and recent grey literature, this study’s research objective was to provide a granular understanding of gaps in finance flows and financial instruments, mapped against the innovation cycle of companies that provide clean cooking solutions. In the context of wide-ranging barriers to the clean cooking sector’s development, we found a chronic shortfall of finance for companies at the early stages of their business growth and poorly targeted public finance to support innovation and mitigate risk for later-stage investors. This is exacerbated by limited data sharing and knowledge exchange among a small number of funders. We recommend reforms to public funding for clean cooking enterprises, especially for research, development and demonstration (RD&D) and innovation, to mitigate risk for later-stage investors, as well as more effective data sharing, to help catalyse sufficient, appropriate finance through the value chain for universal access. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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23 pages, 1988 KiB  
Article
Evolution of Green Finance: A Bibliometric Analysis through Complex Networks and Machine Learning
by Mariana Reis Maria, Rosangela Ballini and Roney Fraga Souza
Sustainability 2023, 15(2), 967; https://doi.org/10.3390/su15020967 - 05 Jan 2023
Cited by 5 | Viewed by 4047
Abstract
A fundamental structural transformation that must occur to break global temperature rise and advance sustainable development is the green transition to a low-carbon system. However, dismantling the carbon lock-in situation requires substantial investment in green finance. Historically, investments have been concentrated in carbon-intensive [...] Read more.
A fundamental structural transformation that must occur to break global temperature rise and advance sustainable development is the green transition to a low-carbon system. However, dismantling the carbon lock-in situation requires substantial investment in green finance. Historically, investments have been concentrated in carbon-intensive technologies. Nonetheless, green finance has blossomed in recent years, and efforts to organise this literature have emerged, but a deeper understanding of this growing field is needed. For this goal, this paper aims to delineate this literature’s existing groups and explore its heterogeneity. From a bibliometric coupling network, we identified the main groups in the literature; then, we described the characteristics of these articles through a novel combination of complex network analysis, topological measures, and a type of unsupervised machine learning technique called structural topic modelling (STM). The use of computational methods to explore literature trends is increasing as it is expected to be compatible with a large amount of information and complement the expert-based knowledge approach. The contribution of this article is twofold: first, identifying the most relevant articles in the network related to each group and, second, the most prestigious topics in the field and their contributions to the literature. A final sample of 3275 articles shows three main groups in the literature. The more mature is mainly related to the distribution of climate finance from the developed to the developing world. In contrast, the most recent ones are related to climate financial risks, green bonds, and the insertion of financial development in energy-emissions-economics models. Researchers and policy-makers can recognise current research challenges and make better decisions with the help of the central research topics and emerging trends identified from STM. The field’s evolution shows a clear movement from an international perspective to a nationally-determined discussion on finance to the green transition. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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22 pages, 3034 KiB  
Article
A Blockchain-Based Financial Instrument for the Decarbonization of Irrigated Agriculture
by Julio Pombo-Romero and Oliver Rúas-Barrosa
Sustainability 2022, 14(14), 8848; https://doi.org/10.3390/su14148848 - 19 Jul 2022
Cited by 4 | Viewed by 2129
Abstract
Farming and food production sustainability increasingly depends on the availability of a clean energy model for irrigated agriculture. This can be achieved by massively introducing photovoltaic irrigation systems (PVI) with sufficient quality and reliability. Nevertheless, such PVI projects require high upfront investment and [...] Read more.
Farming and food production sustainability increasingly depends on the availability of a clean energy model for irrigated agriculture. This can be achieved by massively introducing photovoltaic irrigation systems (PVI) with sufficient quality and reliability. Nevertheless, such PVI projects require high upfront investment and long payback times, so access to long-term, low-cost capital is essential to ensure their competitiveness. In this regard, decentralized financial (DeFi) solutions based on blockchain (BC) technology present a number of features that can be applied to produce financial instruments (FI) well suited to attract investors to PVI projects and to reduce the cost of clean energy for irrigators. In order to assess such a possibility, a DeFi FI tailored for PVI has been produced and implemented in BC. We demonstrate that a single smart contract executed in a distributed ledger can execute the different tasks related to the securitization of PVI assets. The impact on the cost of capital for PVI projects is significant, leading to an estimated reduction in the cost of clean energy for irrigators of 22%. Nevertheless, decentralization also introduces a number of specific risks that must be considered and mitigated. Full article
(This article belongs to the Special Issue Energy Transitions and Green Finance towards Sustainability)
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